Bitcoin Price Fluctuations
Bitcoin's price has been fluctuating around the $60,000 - $65,000 mark for the majority of the week. The recent dip off the back the launch of the Hong Kong ETFs which left many investors disappointed. Furthermore we have noticed that Bitcoin has seen a decrease in whale activity since March 14th, potentially indicating a shift in market dynamics. Whale activity refers to the trading behaviour of entities or individuals holding large amounts of Bitcoin, often considered to be influential players in the market.
Bitcoin Weekly Price Chart
Altcoins Bleed
With Bitcoin down, Altcoins are down even more. Ethereum is down 9% on the weekly while the likes of Solana and Stacks are down 21% and 30% respectively.
Daily crypto liquidations have been over $350 million USD. Liquidations occur when traders' leveraged positions are automatically closed due to the loss of the trader's initial margin. Over $330 million of the total liquidations were long liquidations, and the remaining $48.6 million where from people shorting the market.
Crypto Liquidations
Hong Kong Spot ETFs Debut
Hong Kong's spot Bitcoin and Ethereum ETFs debuted on April 30th, with expectations of larger trading volume compared to the US market. The launch of these ETFs was highly anticipated, as they were the first spot crypto ETFs to be listed in Hong Kong.
However, the total trading volume, including both Bitcoin and Ether ETFs, on the opening day was just $12.4 million, much lower than the $140 million that issuers expected. This underwhelming trading volume suggests that investor interest may have been overestimated.
The price of Bitcoin fell sharply on April 30th following the unimpressive launch of the spot BTC ETF in Hong Kong. This price drop is related to the market's disappointment with the low trading volume, as well as potential profit-taking by investors who had anticipated a more successful launch.
Hong Kong Crypto ETF Volumes
Fear and Greed Index
April is the first month since January in which the Crypto Fear and Greed Index has returned to neutral territory. The Crypto Fear and Greed Index is a widely followed indicator that measures market sentiment based on various factors, including volatility, trading volume, and social media activity.
A neutral reading in the index suggests that the market is neither overly fearful nor overly greedy, potentially indicating a more balanced and stable environment for investors to look at new investments and consider portfolio rebalancing. However we do expect that if Bitcoin continues to fall, fear will be heightened and we will have amazing buy opportunities.
In contrast, the Fear and Greed Index for stock markets has entered the fear phase for the first time since October 2023 with a value of 41. The divergence between the crypto and stock market sentiment indicators a decrease in correlation between these asset classes as investors may currently see better opportunity in the web 3 sector.
Stocks Fear & Greed Index
Bitcoin ETF Flows
Bitcoin ETF flows have been mostly negative this week. We are currently on a 5 day negative streak in regards to ETF net flows, totalling to $603.8 million since April 23rd. Volume has also been extremely low compared to previous weeks. From April 22 to April 29, volume has only amounted to $8.7 billion.
Australia ETF
In more positive light, Bitcoin ETFs are expected to launch on Australia's ASX Exchange in 2024. The introduction of Bitcoin ETFs in Australia would provide local investors with a regulated and accessible way to gain exposure to the world's largest cryptocurrency.
Bitcoin ETF Flow Table (US$m)
MicroStrategy's Bitcoin Stash
MicroStrategy, a prominent business intelligence firm, has expanded its Bitcoin holdings to $13.5 billion, solidifying its position as a major institutional investor in the cryptocurrency. The company, led by Michael Saylor, has been aggressively accumulating Bitcoin since 2020, believing in its potential as a store of value and hedge against inflation. Between April 1 and April 26, 2024, MicroStrategy purchased an additional 122 Bitcoin for a total of $7.8 million, bringing their total holdings to 214,400 Bitcoin. With more than 1% of the total Bitcoin supply in hand, MicroStrategy's continued investment showcases the growing institutional adoption of cryptocurrencies and the increasing acceptance of digital assets as a legitimate investment vehicle.
Fed Rate Decision and Market Impact
Stocks and crypto have been sliding ahead of the upcoming Federal Reserve rate decision on May 1, signalling the low chance of a rate cut. The Federal Reserve's monetary policy decisions, particularly regarding interest rates, can have significant implications for various risk-on asset classes, including digital assets. Investors are closely watching the Fed's stance on interest rates, as higher rates or no rate cuts could potentially result in outflows from riskier assets like crypto.
Binance Founder Sentenced to Prison
Changpeng Zhao, the founder of the Binance cryptocurrency exchange, was sentenced to four months in prison. While the specific details of the case are not provided, this development highlights the ongoing regulatory and legal challenges faced by centralised exchanges.
The sentencing of a high-profile figure like Zhao could have implications for the broader crypto ecosystem, potentially impacting investor confidence when it comes to investing using centralised entities like Binance. Fortunately there are many alternatives to this such as having your own custodial wallet where your assets are protected against centralised exchange risk.
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