Bitcoin BTC +0.25% long liquidations surged above $145 million in the past 24 hours as the price plummeted to a multi-month low. Analysts pointed to a downturn in demand from U.S.-based investors as a major cause of the recent price correction.

There was a total of $166 million in liquidated bitcoin positions in the past 24 hours. The wider cryptocurrency market was hit by over $463 million liquidations in the same period. Of these combined crypto liquidations, the vast majority — around $398 million — were long positions, according to Coinglass data.

Bitcoin is holding precariously above the $57,000 mark, having fallen by almost 8% in the past 24 hours, and was trading at $57,161 at 5:22 a.m. ET, according to The Block’s Price Page. The price of ether has dropped by 6.2% to $2,870 in the same period.

The price of bitcoin has fallen to a multi-month low. Image: The Block.

Bitcoin price correction due to slump in demand

The recent bitcoin price correction can be attributed to a slowdown in the growth of demand for the asset, according to this week's CryptoQuant market report.

The report observed slower growth in the bitcoin balance of permanent holders and large 'whale' investors in the spot market. "Bitcoin whale demand growth peaked at a monthly growth rate of 12% in late March and has now slowed down to 6%. Price rallies are typically driven by faster growth in bitcoin demand from large investors," CryptoQuant analysts said.

The report added that the weakness in bitcoin demand is also evident in the Coinbase premium, which is observed to have trended down since early March, declining below zero in the last few weeks. "When the Coinbase premium declines below zero it means that the price of bitcoin is lower in the U.S. compared to outside the country, pointing to lower appetite from U.S. investors to purchase bitcoin," CryptoQuant analysts added.

The decline in U.S.-based demand is also evident from indicators showing that the U.S. spot bitcoin exchange-traded fund (ETF) market is on track to experience its first month of net outflows since multiple funds launched on January 11.

New bitcoin price target

CryptoQuant analysts have set a new short-term price target for bitcoin of between $55,000 and $57,000, noting that the current bitcoin price is already below traders’ cost basis. "From a short-term valuation perspective prices may target $55,000-$57,000. This level is 10% below the current cost basis of traders, at $63,000, which has been the ultimate support for prices during bull markets," analysts said.

The report also highlighted an increase in bitcoin supply, as bitcoin miners have intensified their selling activity over the last month. Specifically, the 30-day average of daily miner selling was observed to have surged to its highest level since early January.

Bitcoin dominance edged down slightly over the past day to 50.3%, with ether dominance seeing a slight uptick to 15.7%, according to Coingecko data. The global cryptocurrency market cap decreased by 6.5% in the past 24 hours and now stands at $2.25 trillion, according to The Block's Prices Page.

The GM 30 Index, representing a selection of the top 30 cryptocurrencies, fell 6.8% to 118.77 in the same period.