As Bitcoin's highly anticipated halving event draws near, the cryptocurrency market witnessed a significant downturn, with Bitcoin plunging below the key $60,000 threshold. CoinMarketCap data reveals a more than 3% drop in Bitcoin's price over the past 24 hours, settling at $59,800 at the time of reporting. Concurrently, trading volumes saw a notable decline of nearly 12%, totaling $40 billion.

Amidst the price decline, traders have been actively liquidating their positions, with a staggering $115 million worth of assets being offloaded in just four hours. Of this amount, approximately $96.70 million comprised long positions, while the remainder consisted of short positions. Notably, the largest share of liquidations occurred on the OKX crypto exchange, totaling $43.81 million.

The looming BTC halving event, slated to occur in a few days, has likely prompted traders to reconsider their positions, given the seismic impact expected from this milestone. The halving mechanism, which reduces miner rewards by 50%, is anticipated to curtail the supply of new coins entering the market—an aspect viewed optimistically by many Bitcoin proponents.

However, the run-up to the halving has been marked by heightened volatility, driven not only by the impending event itself but also by other market dynamics. Investors have been withdrawing funds from popular Bitcoin ETFs following remarks by U.S. Federal Reserve Chairman Jerome Powell, who suggested that the central bank needs to witness further progress on the inflation front before considering rate cuts.

Markus Thielen, head of research at 10x Research, highlights the accumulation trend among crypto miners that commenced in January 2024, aiming to create a supply-demand imbalance. This strategy propelled Bitcoin's price sharply upward, culminating in its historical peak in March. However, post-halving, digital asset mining companies are expected to gradually sell off accumulated coins, exerting downward pressure on cryptocurrency prices.