Bitcoin experienced a significant price drop on March 15th. The digital asset fell from $72,000 to $66,500 in a matter of hours, with liquidation volumes exceeding $682.54 million among more than 191,000 traders. This sharp decline was caused primarily by liquidations of long positions, which accounted for 80% of the total number of liquidations.

Macroeconomic conditions also played a significant role in the downward pressure on the Bitcoin price. The recently released US Producer Price Index (PPI) data, which showed a 0.6% rise in February, beat forecasts and pushed US bond yields higher.

The development has caused traders to adjust their expectations for the Federal Reserve's interest rate policy in 2024 amid growing awareness of the challenges posed by persistent inflation in meeting the Fed's 2% inflation target.

Bitcoin's price decline below the $70,000 threshold is also due to Coinbase Premium falling into negative territory for the first time since February 26th.

This indicates bearish sentiment in US markets and is likely a consequence of significant selling of Grayscale GBTC, while spot ETFs have seen relatively quiet activity. After record net inflows of $1 billion for spot ETFs on March 12, inflows recently fell to just $132.7 million.

Some analysts describe the pullback from record highs as a typical respite seen after a sharp uptrend. Others attribute the correction to uncertainty ahead of mining rewards being halved next month, with some stakeholders fearing the price of Bitcoin will rise too quickly and risk a flash crash.

Despite the recent decline, some analysts believe the broader uptrend will remain intact as long as demand for BTC spot ETFs continues. QCP Capital, a Singapore-based firm, noted that their department is seeing strong demand for 100-150k BTC at the end of the year, suggesting that the market is expecting the price of Bitcoin to recover and reach new highs.

Another factor contributing to Bitcoin's price decline is Grayscale's ongoing sale of the cryptocurrency. The fund manager transferred more than $400 million in BTC to its custodian Coinbase, adding to already high inflation rates in the US. The move comes after Grayscale converted its Bitcoin Trust into an ETF on January 10, allowing investors to redeem their holdings and profit.

The cryptocurrency market overcomes these challenges, it remains to be seen how Bitcoin's price will react in the coming days and weeks.

While some volatility is expected, especially following the release of the Federal Open Market Committee minutes next week, Bitcoin's long-term outlook remains bullish among many market participants.