The whole network Get Liquidated 270 million RMB! BTC fell below 70,000 overnight, why did it suddenly drop?

Bitcoin plummeted below 70,000 overnight, causing a total of 270 million pounds to get liquidated across the network.

Although BTC surged to near its all-time high recently, it suddenly dropped in the early hours of October 31. As of this morning (11/1) writing, BTC is priced at $69,274, a decrease of over 3,400 points from the 24-hour high of $72,679.

At the same time, there has been a certain scale of Get Liquidated in the cryptocurrency leverage contract market. CoinGlass data shows that in the past 24 hours, there were about 90,000 people liquidated, with a total liquidation amount of 275 million USD. Among them, the liquidation amount of long orders reached 246 million USD, and the liquidation amount of BTC long orders reached 86.88 million USD.

Source: Bitcoin falls below 70,000 overnight, 2.7 billion pounds of Cryptocurrency leveraged contract market Get Liquidated

Why did BTC fall below $70,000 from above $72,000? We have compiled 4 possible reasons based on the perspectives of multiple foreign media outlets:

1. Macro Economy: Strong US Non-Farm Payrolls, Lingering Inflationary Pressure

According to the Commercial Times, the US ADP employment report for October (known as the small non-farm) showed that private employment increased by 233,000, far exceeding the market's expected 115,000, reaching a 15-month high. ADP's chief economist Richardson said that even excluding post-disaster reconstruction (Florida hurricanes) and other factors, the October employment data remains strong, indicating that the job market is still robust.

Due to strong performance in the job market and persistent inflationary pressure, the market is beginning to worry that the Fed may not continue to cut interest rates too quickly.

Prominent financial media 'The Kobeissi Letter' pointed out that due to the high levels of core PCE (personal consumption expenditure) and core CPI (consumer price index), the 'Fed pivot' schedule may be delayed again.

According to CME's FedWatch tool, the market generally predicts that the probability of the Fed only cutting interest rates by 1 point in the November 7th Interest Rate decision is as high as 96%, and the probability of maintaining the current Interest Rate is 4%.

Image source: Fed Watch CME Fed Observer (Fed Watch) data.

2 Technology stocks plunge affecting market confidence

According to Reuters, Meta and Microsoft released their latest financial reports last night, showing that both companies saw a rise in AI-related costs, resulting in a 4.1% and 6% drop in stock prices respectively, causing the Nasdaq index to fall by more than 2%.

The weak performance of technology stocks also affects the sentiment of the encryption currency market, as these two markets often show a positive correlation.

Technical analysis and frequent on-chain data warnings

The foreign media "Cointelegraph" warned before the fall on October 31 that several technical indicators currently indicate that the market may be overheated, with the risk of a pullback.

CryptoQuant's blockchain analysis platform data shows that 99.7% of BTC supply is in a profitable state, which may lead to an increase in selling pressure from profit-taking.

Source: CryptoQuantBTC: Percentage of supply in profit and loss

From a technical perspective, there is a significant technical resistance near $73,500. Bitcoin (BTC) encountered selling pressure at this level in the past, resulting in a cumulative pullback of 23%.

Source: TradingView BTC daily candlestick chart

In addition, the relative strength index (RSI) is Overbought in multiple time periods, with the RSI of the daily candlestick, 12-hour, and 4-hour K-line reaching 71, 72, and 73 respectively.

As of October 31st, the Cryptocurrency Fear and Greed Index was 77, indicating that the market was in a state of extreme greed; however, after a big fall overnight, the index has fallen to 44 this morning, indicating a level of fear.

4 The uncertainty of the US election is heating up

According to CoinDesk, on the prediction platform Polymarket, Trump's chances of winning the election have dropped from 67% to 61%, bringing uncertainty to the market.

However, Quinn Thompson, founder of Lekker Capital, reminds that the U.S. election is just one aspect of the current trading environment, and factors such as the tension between Iran and Israel and the soaring yield of British government bonds are also affecting the market.

Thompson also pointed out that after BTC rose 22% in 20 days, the current pullback may be simply a profit-taking behavior. GSR's director of research, Brian Rudick, said that although Trump's victory did put pressure on BTC prices, considering the decline in the stock market, BTC's performance is actually quite robust.

Looking at the current market, with many important events taking place in the first week of November, including the FOMC interest rate decision, US non-farm payroll data, and the US election, market fluctuations may further intensify. Investors need to pay attention to these risk factors and respond cautiously to market uncertainty.

Disclaimer: The market is risky, and investment should be cautious. This article does not constitute investment advice. Users should consider whether any opinions, viewpoints, or conclusions of this article are applicable to their specific circumstances. Investing based on this is at your own risk.