Bitcoin (BTC) lost considerable ground in April 2021, however, Ethereum (ETH) and other altcoins soared high, OKEx reports in a comprehensive crypto market update.
April 2021 finally broke BTC’s winning streak “despite it being a historically positive month for price action,” the report from OKEx noted while adding that the leading crypto “ended April with a loss of 3.62% after posting a new all-time high of $64,847 on April 14, 2021.”
As noted in the report shared with CI, the “subsequent retracement saw support from spot buying power in the last week of the month as BTC rebounded to 57,000 USDT levels, however, it was not enough to print a green monthly candle.”
During the month of April, we saw large BTC options reach their expiration dates which “continued to pressure the market as the price repeatedly fell back to max pain levels each week,” the report revealed.
As mentioned in the extensive report:
“The Dollar Index saw a significant pullback in April, falling from 93, all the way down to around 90 before rebounding toward the end of the month. The 10-year U.S. Treasury yield also fell from a peak of 1.75% in March to a low of 1.53% in April. These factors led to the general upward price movement in risk assets. However, the Volatility Index or VIX, denoting market expectations of volatility in the stock market, remains near the bottom.”
As noted in the market update from OKEx, from a “returns perspective,” BTC “underperformed global assets in April with a monthly decline of 3.62%.” The S&P 500 Index and the Nasdaq Composite kept rising at a steady pace last month, “posting 5.3% and 5.4% monthly returns, respectively.”
The Bloomberg Commodity Index recorded its best-perforing (8.3%) monthly advance in almost a year because of the “upswing” in inflation, and gold prices also surged 3.6% in the month “due to a weakening dollar,” the report added.
The report also noted that Bitcoin “maintained its strong bullish momentum at the beginning of April, benefiting in large part from the hype around Coinbase going public.” The OKEx quarterly BTC futures contract premium had “risen to more than 10%,” the report revealed while adding that the in futures premium was “inevitably captured by arbitrageurs, and then on the day of Coinbase’s direct listing on Nasdaq, Bitcoin went into a downward spiral as market participants ‘sold the news.'”
As noted in the OKEx crypto market update:
“A major occurred on the third Sunday of April, when liquidity was thin. A 16% drop took the price from 61,000 USDT down to 50,900 USDT at one point, triggering the largest 24-hour liquidations across exchanges ever at $9.54 billion. On the same day, BTC open interest dropped by 27% on OKEx, and it failed to return to pre-collapse levels until the end of the month.”
During this “flash” crash, the quarterly and the bi-quarterly futures were “briefly but significantly below the perpetual swap price,” the update revealed while pointing out that this “unusual occurrence in a bull market caught many traders off guard.”
The report also mentioned that Bitcoin did not “really start to rebound after it made a fake downward break to 47,000 USDT levels.” The “rapid rebound in the final week was driven by spot buying, and the market leader closed the month at 57,142 USDT per OKEx spot price,” the report added.
The OKEx report further noted:
“ETH posted its eighth consecutive month of gains in April … and a 48% rally last month is also its best monthly gain after January 2021. Ethereum’s Berlin hard fork went live on April 14, and market participants appear confident in the ETH price ahead of this summer’s London hard fork … the ETH price jumped from 1,850 USDT in early April to 2,800 USDT levels by the end of month.”
The dramatic surge in Ethereum further “drove the altcoin season toward another peak,” the report added while noting that the altcoin-season index reached “a high of 98 in mid-April.” The last time this was observed was in “early 2018,” the OKEx team confirmed. This also “resulted in Bitcoin’s dominance falling 17% to become less than 50% by the month-end,” the report added.
The report continued:
“[DogeCoin] achieved a whopping 487% surge in April, driven by momentum from consistent Twitter hype from the likes of Elon Musk over the past few months and its notoriously active community. DOGE finished the month with a $42 billion market cap, entering the top five cryptocurrencies by market cap on major aggregators.”
The report from OKEx pointed out that they “saw market participants rotating from BTC to older altcoins that were popular during the last bull run, in 2017.” As a result, XRP and Ethereum Classic (ETC) “grew 186% and 167% in April, respectively, while other major altcoins also performed positively, with the exception of Polkadot (DOT),” the report confirmed.
It’s worth noting that the crypto market has suffered two major shocks recently with Elon Musk‘s Tesla no longer accepting BTC payments due to concerns about the cryptocurrency’s excessive use of fossil fuels (consumed during Bitcoin mining).
Ethereum co-founder Vitalik Buterin has donated cryptocurrencies valued at around $1.5 billion to various non-profits – which notably included a $1 billion donation to a COVID-19 relief fund in India.
Ethereum founder Vitalik Buterin donates $1.14 billion in meme coins to Covid-19-hit India #VitalikButerin #Cryptocurrency #CryptoReliefFund #Ethereum #SHIBMemeCoins #IndiaCovidCryptoReliefFund #Covid19InIndia #MemeCoin #ShibaInuMemeCoins #MemeCoins https://t.co/RPbqcHnlvE
— ET CIO (@ET_CIO) May 13, 2021
These transactions or moves by Buterin and Musk have introduced even more volatility into the highly-risky and unstable price movements in the digital asset markets.
BTC price has dropped below $50,000 at the time of writing and Ethereum price is below $3,700 after recently surpassing the $4,300 mark.