The daily fluctuations in the global Bitcoin price are influenced by multiple factors, among which the liquidity shock in the capital market is the first to be affected. The Federal Reserve’s interest rate decision can instantly trigger market volatility. For instance, after raising interest rates by 25 basis points in March 2023, Bitcoin plunged by 7% within an hour, with a fluctuation range of up to 3,000 US dollars. Institutional capital flow is equally crucial. For every additional $100 million in daily net inflow into BlackRock’s spot ETF, the average price rises by 1.5%. According to CoinGlass data, when the liquidation amount in the derivatives market exceeds 500 million US dollars, the probability of a price correction is as high as 80%. Contracts with a leverage ratio over 20 times often lead to a 5% stampede decline within 15 minutes.
Policy and geopolitical conflicts have caused non-linear disturbances. On the day of the outbreak of the Russia-Ukraine war in 2022, the trading volume of Bitcoin soared by 250%, but subsequently, Russia was subject to SWIFT sanctions, which led to a 40% premium rate for the exchange of rubles for Bitcoin. Regulatory dynamics are even more decisive factors. After China completely banned mining in 2021, the total network computing power dropped by 50%, directly causing the price of Bitcoin to fall by 30% in a single month. The lawsuit filed by the US SEC against Binance in June 2023 triggered a chain reaction, causing the total market value of cryptocurrencies to evaporate by 12% in a single day. The market’s fear and greed index dropped from the “greedy” to the “extreme fear” zone within three hours.
The cost structure of the supply chain deeply shapes the price support level. According to the model of the Cambridge Alternative Finance Centre, when the electricity price exceeds $0.05 per kilowatt-hour, 45% of the global mining machines will suffer losses. At this time, the shutdown wave will reduce the selling pressure and form a bottom. For instance, during the “Black Thursday” in March 2020, the electricity cost ratio of some mining farms exceeded 60%, triggering a series of liquidations and causing the price to drop by more than 50% in a single day. The change in hash rate is also a key indicator. When the monthly growth rate of the total network computing power is less than 5%, it usually indicates that the probability of a price decline in the next three months is 65%, which is highly correlated with the batch shutdown threshold of S19 mining machines.
Market sentiment generates positive feedback through derivatives and spot products. When the funding rate of perpetual contracts remains above 0.1% for 48 consecutive hours, the market overheating signal will attract arbitrage trading, increasing the probability of the price returning to the median to 70%. It is worth noting the regional small currency price transmission effect. For example, the data of Q1 2024 shows that when the daily quote of pi coin price in pakistan fluctuates by more than 15%, it is often accompanied by a 20% increase in the P2P trading volume of Bitcoin on LocalBitcoins in Pakistan. It reflects that investors in emerging markets will turn to Bitcoin for safety when non-mainstream crypto assets experience severe fluctuations. This correlation shows a Pearson correlation coefficient of 0.3 statistically, especially when the daily decline of altcoins exceeds 30%.