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Bitcoin’s April Plunge: Ending a Seven-Month Winning Streak

Bitcoin, the dominant cryptocurrency in terms of market value, experienced a significant drop of nearly 15% during April, bringing an end to its seven-month winning streak.

The trading activity in the cryptocurrency market cooled off last month, marking the first decrease in seven months. This decline was influenced by rising geopolitical tensions and reduced inflows into U.S.-listed spot ETFs, putting pressure on the digital assets market. According to a report from CCData, the total volume in both spot and derivatives markets plummeted by 43.8% to $6.58 trillion, a notable retreat from the record high of $9.12 trillion seen in March.

Investor interest in derivatives waned as activity in futures and options markets dropped by 47.6% to $4.57 trillion. Meanwhile, the spot market experienced a relatively modest decline of 32.6% to $2.01 trillion.

CCData attributed this decline to unexpected macroeconomic data, escalating geopolitical tensions in the Middle East, and negative net flows from U.S. spot bitcoin ETFs, resulting in major cryptocurrencies retracing the gains made in March.

Bitcoin, specifically, saw a 15% decrease in value, dropping below $60,000 last month, breaking its streak of seven consecutive months of growth. This sell-off occurred amidst a heated bull market encountering widespread risk aversion, characterized by renewed tensions in the Middle East, reduced likelihood of rapid Fed rate cuts this year, and a stronger dollar index.

While Binance retained its position as the largest crypto exchange by volume, its combined spot and derivatives market share decreased to 41.5%. The exchange’s spot market trading volume experienced a significant decline of 39.2% to $679 billion in April, marking its first decrease since September 2023.

CCData also pointed out that the decline in Binance’s market share coincided with news of its founder and former CEO, Changpeng Zhao, being sentenced to four months in prison for violating U.S. money laundering laws. Following Zhao’s resignation and guilty plea to U.S. criminal charges in November, he was replaced by Richard Teng. Since then, Binance’s spot market share has risen from 30.8% to 33.8%, according to CCData.

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Disclaimer: Not Investment Advice

it’s crucial to understand that the information provided here is not to be construed as investment advice. The crypto market is dynamic and highly speculative, and decisions should be made based on thorough personal research and consideration of individual risk tolerance. Always consult with financial professionals and conduct your own due diligence before making any investment decisions. The intention of this exploration is to present insights and trends, not to provide specific investment recommendations.

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