After several months of impressive performance, Bitcoin has endured its most difficult month since the collapse of FTX, recording a significant 14.93% decline in the month of April 2024. This decline signals a pause in market euphoria and reminds investors of the short-term volatility of cryptocurrencies.
An intense start to 2024 for Bitcoin
Since its low, the Bitcoin price has posted performances that seemed unthinkable just a few months earlier. After an eventful 2022, marked by the downfall of major ecosystem players such as blockchain Terra (LUNA), exchange platforms Celsius and FTX, as well as a 77% plunge in the space of 12 months, many investors had given up hope.
However, Bitcoin’s anti-fragility characteristics enabled it to emerge stronger from these ordeals, taking it from $15,400 at its lowest point to over $73,000 in March 2024.
In September 2023, the BTC price began a dizzying ascent, building on the $25,000 support to soar beyond its previous all-time high (ATH).
Bitcoin price against the dollar since 2021
No doubt buoyed by institutional demand, thanks in particular to spot Bitcoin ETFs – a financial product that allows exposure to the value of BTC without owning it directly – the market was perhaps a little too optimistic over a short period, leading it to pause for several weeks.
Spot Bitcoin ETFs quickly attracted new investors, setting numerous records. Since their approval in January 2024, over $12 billion in net incoming volumes have been recorded, even reaching a record day with over $1 billion in net incoming volumes on March 12.
April, the worst month for Bitcoin in 1.5 years
Unfortunately, such dynamics rarely last more than a few months. Thus, the peak at $73,750 marked the start of a Bitcoin price correction, with a total drop of 23% to its recent low of $56,500.
April thus closed on a 14.93% decline, marking the worst month for Bitcoin since the FTX platform fell in November 2023, which saw a 16.24% drop.
This recent decline has led to the liquidation of nearly $400 million across all cryptocurrencies in the last 24 hours, accumulating several billion dollars in liquidations over the course of April 2024.
Total liquidations across the entire cryptocurrency market since November 2023
In hindsight, this recent drop is relatively insignificant compared to Bitcoin’s performance since the beginning of 2023, and the fall from $73,000 to $57,000 doesn’t impact long-term investors all that much.
Finally, this drop has had the effect of slowing down euphoria on the cryptocurrency market, causing the Fear and Greed Index to fall to a score of 54 out of 100.
