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Bitcoin lost over 16% in April, on track for its worst month since November 2022.
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BTC could fall to the mid-to-low $50,000 range, Ledn CIO said.
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The spot crypto ETF’s Hong Kong debut wasn’t as bad as it was made out to be, a Bloomberg Intelligence ETF analyst noted.
It may be time to call the cryptocurrency correction a bear market as Bitcoin {{BTC}} fell below $60,000 amid what appeared to be a weak debut for spot ETFs in Hong Kong and interest rate fears gave traders plenty of reason to fear on Tuesday gave sales.
BTC hit a low of $59,100 in the afternoon hours, its weakest price since late February, falling over 5% in the last 24 hours. The broad market CoinDesk 20 Index (CD20) declined even more over the same period, falling 6%, while Ether {{ETH}} and Solana {{SOL}} posted losses of 7% to 8%.
Bitcoin is now down about 20% from its all-time high of over $73,000, reached in mid-March.
Traditional markets also struggled after a flurry of U.S. economic reports on Tuesday morning gave a stagflationary impression, showing slowing growth and increased price pressures. The Nasdaq lost 2% for the day, while the S&P 500 fell 1.6%.
Recent reports showing stronger U.S. economic data and higher inflation have significantly reduced the Federal Reserve’s interest rate cut expectations, and that is weighing on the digital asset market, Joel Kruger, market strategist at LMAX Group, pointed out in a report on Tuesday .
“We continue to see signs that the Fed will need to return to a higher monetary policy outlook in the longer term, despite investor calls for more easing,” Kruger said. “As the US dollar regains popularity across the board, we are seeing this influence extend to crypto assets as well.”
Worst month since FTX
With Tuesday’s decline, BTC and the broader crypto market are on track to end their seven-month winning streak with their worst monthly decline since November 2022, when crypto exchange FTX imploded.
A few hours before the last day of the month (UTC time), Bitcoin is down over 16% and Ether is down 18% for April. Smaller cryptocurrencies suffered an even sharper correction, with altcoin darlings SOL and Dogecoin {{DOGE}}, avalanche {{AVAX}} down 35-40% this month.
Overall, the total crypto market cap lost almost 18% of its value, recording the largest decline since June 2022. TradingView data shows.
Bitcoin’s decline may not be over yet
“I expect a sell-off in the mid to low $50,000 range [for BTC]which should prove to be a buying opportunity,” said John Glover, chief investment officer at crypto lending firm Ledn.
According to K33 Research, seasonal effects with lower interest rates in the summer months also indicate lower prices.
“A trader who chooses the strategy of buying BTC on the opening date in May and closing the trade on…
The September close would have produced a total return of -29% over the past five years, said K33 analyst Vetle Lunde. “While a trader who bought the October open and sold during the April close would have made a massive 1,449% return.”
The (not so) tepid Hong Kong ETF debut
The first day of Hong Kong-listed spot Bitcoin and Ether ETFs failed to excite market participants focused on the products, with trading volume hovering just over $10 million.
However, the debut was more successful than at first glance, considering that the Hong Kong ETF market is only a fraction of the US market size, pointed out Eric Balchunas, senior ETF analyst at Bloomberg Intelligence.
“If you localize the numbers, that was big,” Balchunas said.
ChinaAMC’s Bitcoin product alone amassed over $123 million in assets in its first trading session, making it the sixth-best ETF launch in the past three years and already among the 20% of largest ETFs, he said quoted Bloomberg data.
Balchunas also added that the Hong Kong-listed ETFs came at a “good time” and could help offset outflows from US products, which have slowed recently.