Bitcoin typically moves in line with how confident people feel about taking risks in the stock markets. Despite this trend, the recent drop in bitcoin's value happened while major stock market indicators reached their highest points yet on Thursday, marking the second time in a row. The Dow went up by about 0.7%, with the S&P 500 and Nasdaq Composite rising by around 0.3% and 0.2% respectively. Thursday saw all three indexes securing their fourth consecutive positive session.

The overall economic mood received a boost from recent signs indicating that the U.S. Federal Reserve might cut interest rates, coupled with an unexpected rate cut by the central bank in Switzerland. On Thursday, the Swiss National Bank surprised everyone with a cut to its main interest rate, now standing at 1.5%. This decision came following a drop in Swiss inflation to 1.2% in February. It was the first time in the world that a major central bank had taken such a step, as part of their efforts to combat rising prices post-pandemic.

The leading cryptocurrency by market value saw its worth tumble by more than 4% within the last 24 hours, trading at $63,990 by 8:46 a.m. ET.

Market Volatility in the Recent Day

The recent correction in bitcoin's price led to a notable number of long positions being sold off on centralized exchanges due to the increase in volatility. This situation resulted in the liquidation of over $54 million in bitcoin positions, with the majority—more than $40 million—coming from long positions, as indicated by CoinGlass data.

Similarly, the second-largest cryptocurrency, ether, faced a 3.4% decline over the previous day, resting at $3,417 by 8:46 a.m. ET. SOL, the digital currency native to the Solana network, was hit even harder with an 8% drop within the same timeframe, according to The Block's Prices Page.

In the last 24 hours, the entire cryptocurrency market saw more than $134 million in liquidated long positions, contributing to a total of $192 million in liquidations across different centralized exchanges, according to available data. These liquidations occur when traders have to close their positions because they lack the necessary funds to cover losses, mainly due to unfavorable market movements that erode their initial margin or collateral.

Decrease in Available Bitcoin

The reserves of bitcoin held by exchanges have decreased significantly to levels seen several weeks ago, pointing towards investors withdrawing their coins as part of a long-term investment strategy.

Based on data from CryptoQuant, the last month has witnessed over 44,600 bitcoins being moved out from exchanges, causing exchange reserves to dip to slightly above 2 million bitcoins, hitting a multi-week low.

Since the beginning of the year, the trend of bitcoin flowing out from exchanges to cold storage has been noticeable. This shift could be attributed to the rising price of the digital asset and the inflows into spot bitcoin ETFs, suggesting investors are opting for a longer-term holding approach.