The uncertainty about the Federal Reserve and the conflict between Russia and Ukraine led to high average outflows. Analyst Lyn Aden said that the bearish sentiment in the cryptocurrency and stock market has also caused gold and platinum to drop.
A sharp drop in prices during the beginning of the weekend affected the cryptocurrency and stock market. As various countries were preparing to celebrate the Labor Day holiday, investors wondered where the crypto market might head next in the coming days.
It is hard to predict what will happen, given the volatility in the cryptocurrency market. However, Bitcoin saw losses of over 15%, the worst April in its history, according to data analytics platform Coinglass.
April Is the Worst Month for the Crypto Industry
Flagship tokens largely faltered in April, making it a tough month for cryptocurrencies. Data from CryptoCompare indicates that the price of BTC dropped by 16.3%, and the value of ETH fell by around 14.4%. The uncertainty about the Federal Reserve and the conflict between Russia and Ukraine has affected the digital asset market the most.
A recent report from CryptoCompare establishes that the highest average outflows of 2022 occurred in April. The outflow trend of crypto investment products indicated a significant negative sentiment in the market that might extend until May.
The largest one-week outflow since mid-January, occurring at the end of the first week, was around USD 134 million. The April average weekly outflows stood at USD 79.5 million, mainly from Bitcoin products, suggesting continued pessimism.
The Price of Ethereum Seems to Be on a Roller Coaster
The movement of the price of ETH seems to be like a roller coaster that cannot decide between going uphill or downhill. The latest Bankless report indicates that the Ether revenue went from USD 1.6 billion to USD 2.4 billion, increasing by 46% in the first quarter of 2022.
The study further stated that staked ETH went from USD 5.2 million to USD 10.9 million, an increase of 111%. The bullish report aligns with what many advocates have claimed about the cryptocurrency.
The Debate over the Drop of the Cryptocurrency and Stock Market
Several commentators, experts, and analysts have debated the current bearish sentiment toward the cryptocurrency and stock market. Economist Lyn Aden summarized that they have highlighted that gold, platinum, and Chinese stocks had also dropped.
While the S&P 500 decreased by 3.6% and the Nasdaq 100 index declined by 4.5%, the Hang Seng index gained 4% overall.
On-chain analyst Willy Woo commented that investors already see BTC as a store of value, but it will take time for the price to reflect it. While analyzing the BTC supply shock indicator a few days ago, he tweeted that the pioneering cryptocurrency seems undervalued.
The Price of Bitcoin Is far from Hitting the Bottom
Glassnode analysts claim that the exit of institutional investors from futures markets exacerbates the weakness of BTC. However, on-chain data suggests that Bitcoin is in an early bottoming process.
A recent report by on-chain intelligence firm Glassnode indicates that Bitcoin derivatives now represent the dominant venue for price discovery. The futures trading volume currently represents multiples of spot market volume.
Meanwhile, the price of Bitcoin and the leading altcoins continues to show decreasing variations over the last few days. These range from -3% for BTC, ETH, and above -5% for LUNA, SOL, and ADA.
By Alexander Salazar
