LONDON: Bitcoin fell almost 6% on Wednesday, posting its worst monthly performance in April since late 2022 as investors pulled money out of the cryptocurrency ahead of the Federal Reserve's interest rate decision. .
The value of the world's most traded cryptocurrency fell nearly 16% in April as investors booked profits on a ferocious rally that took its price to an all-time high of more than $70,000.
Bitcoin fell as much as 5.6%, hitting its lowest price since late February. While the most recent drop was 4.8% to $57,001, Ether's losses were smaller, dropping 3.6% to $2,857, also its lowest since February.
Bitcoin's price is currently 22 percent below its March record of $73,803, technically entering a bear market. But it's still up 35% so far this year, double what it was this time last year, largely driven by billions of dollars in newly minted exchange-traded funds (ETFs) since January. This is due to the influx of
“The recent downtrend is due to profit-taking by investors who entered the market during the economic downturn in 2022 and 2023, as well as by ETF investors who witnessed a significant rise in stock prices after entering the market in the early weeks of 2024. ” said Matteo Greco, Research Analyst at Fineqia.
Cryptocurrency stocks fell in pre-market trading in the United States. Shares of cryptocurrency exchange Coinbase fell 4.6%, while shares of mining companies Riot and Marathon Digital fell 4.2% to 4.3%.
On the macro front, the Federal Open Market Committee (FOMC) is not expected to make any changes to interest rates, but investors are betting that the central bank will not cut rates at all this year, potentially hurting interest rates. interest rate-sensitive assets such as cryptocurrencies, emerging market stocks and bonds, and even commodities.
Investors are reacting accordingly. The top 10 U.S. spot Bitcoin ETFs are facing their biggest weekly outflows since their inception in January.
Outflows this week reached up to $496 million, according to LSEG data, largely due to slowing inflows to BlackRock's iShares Bitcoin Trust, its largest holding. Thing.
Even smaller altcoins that sometimes benefit from the weakness of the two big tokens are being punished. Solana's Sol token has lost nearly a quarter of its value in the past seven days, according to data from cryptocurrency website Coingecko, as have meme coins Dogecoin and Shiba Inu, both of which are owned by Tesla owner Elon Musk. It was popularized in 2021 with the cooperation of.
Bitcoin’s so-called “halving event” last month did little to support prices. Since April 20, the day of the halving, Bitcoin has fallen by about 15%. Many investors bought into the market in the run-up to the event, which includes changes to the cryptocurrency's underlying technology designed to slow down the rate at which new Bitcoins are created.
Alex Kupczykevich, senior market analyst at the FXPro platform, said that from a chart perspective, Bitcoin's decline is entering a new phase.
Not only is May a seasonally weak month for Bitcoin, but the price decline over the past few weeks has focused on $55,700 and $51,000-$52,000, he said.
“However, both the FOMC's release later today and the monthly jobs report on Friday have a good chance of accelerating or reversing the downtrend.”
