Bitcoin Bravely Resists Economic and Geopolitical Pressures

Subject to geopolitical, economic, and fiscal weights throughout April, bitcoin has once again proven its resilience as an asset. While a faster descent in its price could have been expected, the cryptocurrency closes the month of April with only a 10% decrease. More details to follow.

Bitcoin in the face of liquidations, gold, and inflation

While bitcoin closed the month of March above $70,000, April was not smooth sailing for the cryptocurrency. However, it demonstrated strong resilience because the US tax season significantly impacted its price. Several American investors had indeed liquidated their long positions to meet their annual tax obligations.

This was compounded by an increase in the cryptocurrency’s supply with the early-April sale of 1,999 BTC by the US government. Yet, bitcoin had already been under considerable pressure with the rise in the gold price over the last three months. Indeed, the yellow metal saw its price increase by 15%, setting a record not seen since the onset of the coronavirus crisis.

Unfortunately, neither the sustained increase in the US consumer price index nor the persistence of geopolitical tensions in the Middle East improved matters. On one hand, there were fears of persistent inflation and a relative deterioration of market sentiment. On the other hand, there were negative financing rates in the markets.

Bitcoin’s resilience was tested yet again this Thursday, as it momentarily dipped below the $63,000 mark. This drop is tied closely to the latest U.S. economic figures which have caused a stir among cryptocurrency enthusiasts and investors alike. With the U.S. reporting a lo…

— Crypto Forum (@Cryptoforum_N) April 26, 2024

Bitcoin and the doubts about short-term trends after the halving

Bitcoin’s price was also affected by the drastic reduction in incoming ETF flows. This mistrust from institutional investors unfortunately adds to the uncertainty caused by the halving on short-term market trends. With doubts regarding the impact of the halving on mining viability and cost structures, the crypto’s volatility is not surprising.

Given all these weights, the 10% decrease after 7 consecutive months of rise is proof that the bitcoin market has reached a certain maturity. While its price is currently trading below $63,000, the crypto is undervalued and could soon surprise.