Bitcoin on track for largest monthly loss since November 2022

Bitcoin fell on Tuesday to two-week lows on risk-aversion, especially after Bitcoin exchange funds in Hong Kong experienced disappointing trading volumes. 

As risk sentiment tanks and concerns about US inflationary recession grow, bitcoin could fall below $60,000. 

The world’s largest cryptocurrency is on track for the first monthly loss since August 2023, and the largest since November 2022 on active profit-taking off record highs.

The Price 

Bitcoin fell 3% at Bitstamp to $61,182, the lowest since April 19, with a session-high at $64,714, after rising 1.2% on Monday, the first profit in four days amid improving risk appetite. 

Bitcoin tumbled 2.85% last week, the fourth weekly loss in a row amid a sudden drop in exchange funds influx. 

Cryptocurrency Market Value 

The market value of cryptocurrencies fell by over $60 billion on Tuesday to a total of $2.385 trillion as both bitcoin and ethereum suffer heavy losses.

Hong Kong’s Bitcoin Exchange Funds 

Interest in the six crypto exchange funds in Hong Kong was far less than expected as trading opened today, with total trading volumes averaging only $11 million, below the $100 million expected. 

Bitcoin funds collected $8.5 million of the total, while ethereum funds collected $2.5 million.

These numbers pale in comparison to the first day of bitcoin exchange funds trading in the US, with trading volumes surging to $655 million back then.

Inflationary Pressures 

Analysts at QCP Capital warned of a potential inflationary recession in the US, as GDP growth rates were less than expected in the first quarter, while high core personal prices data indicate ongoing price pressures. 

It’s now likely that the Federal Reserve will hold interest rates unchanged in the summer.

US Rates 

Most traders still don’t expect any US interest rate cuts in the summer.

In fact, investors now barely expect just a single interest rate cut this year by the Federal Reserve.

Sudden Drop in Cash Flow 

According to initial data, new cash flow to bitcoin funds traded in US exchanges tumbled this month. 

The bitcoin exchange fund managed by BlackRock lost its momentum on Wednesday, and failed to attract investments for the first time since its launch. 

It has already managed to attract over $15 billion so far, however all flow was focused in the first quarter, in turn hurting spot bitcoin prices. 

Monthly Trades

Bitcoin is down over 14% so far in April, on track for the first monthly loss since August 2023, and the largest since November 2022. 

Bitcoin marked a record high on March 16 at $73,974, however it pulled away from the record high amid mounting pressures on riskier assets.