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The $70,000 mark seems to have become a difficult barrier for Bitcoin to break through, as it experienced rapid declines again after multiple failed attempts to surpass it.
As a result, the cryptocurrency market once again witnessed liquidations exceeding billions.
Of course, compared to the intense fluctuations seen in previous bull markets, Bitcoin's price retracement this time is not particularly severe, at less than 10%. However, altcoins led by ETH did not fare as well.
Affected by Bitcoin, the price of Ethereum fell below the $3,000 support level for the first time in recent retracements, while Solana, which had been on a strong uptrend, remained weak after network congestion, dropping below $140 during this retracement, a decrease of over 30% from its high. Almost all mainstream, secondary, or newly listed altcoins were not spared, and the cryptocurrency market was in a bloodbath. The sudden plunge left most investors bewildered, resorting only to "cosmic hints".
Unlike in the past, Bitcoin ETF outflows do not seem to be the main cause of this major decline. According to HODL15Capital data on April 13th, US Bitcoin spot ETFs saw a net outflow of $55 million yesterday, with GBTC seeing a net outflow of $166 million, BlackRock IBIT seeing a net inflow of $111 million, and Fidelity FBTC seeing a net inflow/outflow of 0. In fact, ETF outflows have been shrinking over the past week.
In the previous week, despite several market-wide declines, the overall bullish sentiment in the market was not affected. For the cryptocurrency market after April, it is widely believed that it will experience an uptrend.
Matrixport analyst Markus Thielen also expressed optimism about the April market in a post on March 29th. He believes that Bitcoin has been on a significant rise for seven consecutive months, and in April, it may continue to rise by 12% to $84,000 from the $70,000 price level. Zhu Su, co-founder of Three Arrows Capital, also recently stated on social media, "I really don't understand the bearish reasons here. Structurally, April is extremely bullish, with the Bitcoin halving coming up, Ethereum ETF about to be launched, ordinary people waking up from a long slumber, and no NFT at the Basel Art Fair this year. We are still in the early stages."
It is worth noting that on April 13th, after several weeks of continuous gains, the price of gold experienced a violent correction, falling by nearly $100 at one point, with profit-taking investors and the ongoing turmoil in the Middle East being seen as the main reasons behind it.
In addition, Arthur Hayes, co-founder of BitMEX, predicted earlier this month that the market could experience extreme weakness in mid-April, and the real bull market will begin in May.
According to Arthur Hayes' latest blog post titled "Arthur Hayes: The Real Crypto Bull Market Will Start in May," from mid-April to early May, U.S. taxation will withdraw liquidity from the market, coupled with the Federal Reserve's continued tapering, resulting in extreme weakness in the market. However, from May 1st onwards, with the Federal Reserve slowing down its tapering and the U.S. Treasury using funds to stimulate the market, a new round of crypto bull market is expected to begin.
Hayes pointed out that the Federal Reserve has indirectly "blood transfused" the banking system by loosening bank capital requirements, allowing banks to hold more government bonds. The U.S. Treasury has also been issuing short-term government bonds to absorb the tens of trillions of dollars in idle funds in the Federal Reserve's reverse repurchase tool. These two measures are conducive to increasing market liquidity.
However, Hayes expects that the April 15th tax deadline will withdraw a large amount of funds from the system. Meanwhile, the Federal Reserve continues to taper at a rate of $95 billion per month. In addition, the expected oversold condition due to Bitcoin's block reward halving on April 20th will also put enormous pressure on the market.
Hayes advised investors to be cautious in April and to deploy aggressively after May. He revealed that he has already closed positions in tokens such as MEW, SOL, and NMT for profit and transferred funds to the USDe stablecoin on the Ethena platform for pledging. Hayes stated that if he can avoid the risk of losses in April, he will have sufficient ammunition in May to establish positions in various crypto assets and fully enjoy the benefits of the bull market. |
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Post time 21-4-2024 08:27:41