Recent economic data from the United States could lead to a more cautious stance from the Federal Reserve, suggesting a potential shift towards tighter monetary policy.
In April, Bitcoin saw a significant decline of over 16%, marking its worst month since November 2022. According to the Chief Investment Officer of Ledn, BTC may further drop to the mid-to-low $50,000 range. Despite this, the debut of spot crypto ETFs in Hong Kong was not as disappointing as initially perceived, as highlighted by a Bloomberg Intelligence ETF analyst.
The cryptocurrency market experienced notable turbulence, with Bitcoin plummeting below $60,000. This downturn coincided with concerns over the lackluster performance of spot ETFs in Hong Kong and apprehensions regarding interest rates, prompting traders to sell-off assets. Bitcoin’s current price is down approximately 20% from its peak in mid-March.
Traditional markets also faced challenges, with the Nasdaq dropping 2% and the S&P 500 falling 1.6% in response to U.S. economic reports indicating slowing growth and heightened inflationary pressures. This data has tempered expectations for Federal Reserve interest rate cuts, influencing sentiment across the digital asset market.
The crypto market is poised to end its seven-month winning streak, with April shaping up to be the worst month since November 2022. Bitcoin and Ether have both experienced declines of over 16% and 18%, respectively. Altcoins such as Solana, Dogecoin, and Avalanche have suffered even deeper corrections, with losses ranging from 35% to 40%.
Despite the current downturn, some analysts view this as a potential buying opportunity, anticipating a rebound in prices. However, seasonal trends and historical data suggest a cautious approach, with lower interest typically observed during the summer months.
The launch of spot Bitcoin and Ether ETFs in Hong Kong garnered modest trading volume on their first day. While initial impressions may have been subdued, considering the relatively smaller size of the Hong Kong ETF market compared to the U.S., the debut was deemed significant. Notably, ChinaAMC’s Bitcoin product attracted substantial assets, ranking among the top ETF launches in recent years.
