Bitcoin Faces Turbulence in April
April has been a turbulent month for Bitcoin, with its price trading around $70,000 at the start of the month before encountering a series of challenges that brought it to local lows just below the $60,000 mark. Despite nearly four days remaining in the month, Bitcoin is currently trading at around $64,000.
Factors Contributing to Bitcoin’s Price Decline
The month kicked off on a rough note, as the conclusion of the US tax season prompted a potential sell-off of Bitcoin. Economic headwinds compounded the situation, including a significant surge in the price of gold, higher-than-expected inflation, and rising yields, leading to a momentary pause in risk-on assets. Geopolitical tensions in the Middle East also exacerbated the situation, resulting in negative funding rates in BTC for the first time since the end of 2022.
ETF inflows began to taper off, with BlackRock’s IBIT inflows ceasing for two consecutive days while GBTC outflows persisted. The anticipation surrounding the halving event, typically a bullish long-term factor for Bitcoin, added to the uncertainty in the short term, especially regarding transaction fees and miner activities.
Additional Challenges for Bitcoin
The US government’s sale of 1,999 BTC added to the bearish news, further pressuring the price of Bitcoin. Significant volume of liquidations was also observed in Bitcoin, adding to the negative sentiment surrounding the cryptocurrency.
Bitcoin’s Resilience and Future Outlook
Despite these challenges, Bitcoin has shown resilience, as it is only down approximately 11% for the month. The cryptocurrency had achieved seven consecutive months of gains, prompting speculation on whether it could achieve an unprecedented eighth consecutive month of growth.
Additional Insight: The market sentiment towards Bitcoin has been impacted by a combination of external economic factors, geopolitical tensions, and regulatory actions. Investors are closely monitoring how Bitcoin navigates through these challenges and whether it can maintain its upward trajectory in the long run.
