Bitcoin extends weekend sell-off and follows TradFi markets 📌✂️

The price of Bitcoin fell in the morning trading hours to 74,500 USD. The declines were mainly caused by a sell-off in traditional financial markets in reaction to the escalation of the trade war. Currently, Bitcoin is down 2.4% to 76,500 USD. 

Bitcoin remained surprisingly high even at the close of the cash session on Wall Street on Friday. After a two-day sell-off and a 10% drop in the SP500 index, Bitcoin was still holding above the 80,000 USD level. However, over the weekend we learned that more countries are planning retaliatory tariffs, including Japan, Canada, and the European Union, if bilateral talks do not go as expected. The escalation of tensions supported a sell-off in the cryptocurrency market over the weekend, when liquidity is much lower. A strong drop in Bitcoin on Saturday and Sunday signaled a continuation of the sell-off in traditional markets. And that’s exactly what happened... We started the new week with a several-percent sell-off in U.S. index futures and as much as a double-digit sell-off in Chinese contracts. 

If April were to close at current levels, Bitcoin would record its third consecutive month of declines. The drops we are currently observing are largely unrelated to the cryptocurrency sector. Source: xStation 5 

Demand for ETF products linked to Bitcoin has stabilized at slightly negative levels. However, the scale of the current sell-off is negligible compared to the outflows at the beginning of March. Nevertheless, for today, we are likely to see much larger outflows. Source: xStation 5 

The situation for Bitcoin does not look as drastic as for the second-largest project by market capitalization — Ethereum. We have been seeing declines for 5 months in a row, with only one of them not being double-digit. Such a situation only occurred in 2018, when Ethereum dropped for 7 consecutive months. 

Ethereum (D1)

Ethereum has already lost 65% of its capitalization since the December peak above 4,000 USD. Current levels correspond to the beginning of 2023 and are only 30% above the bear market lows of 2022. 

Source: xStation 5