Bitcoin Faces Profit-Taking Amid Economic Uncertainty, As Chinese Markets Struggle
Bitcoin (BTC) and other major cryptocurrencies saw significant declines on Wednesday, as a wave of profit-taking followed a brief rally on Tuesday. The broader crypto market, including Ether (ETH) and Cardano (ADA), dropped by over 3%, with Bitcoin sliding from $84,200 to around $83,500.
Despite China’s economy showing robust 5.4% growth in the first quarter, Chinese stocks in Hong Kong extended their losses, falling by as much as 2.9%. The ongoing concerns about global trade tensions, particularly tariffs, contributed to the risk-off sentiment that impacted both the traditional and crypto markets.
XRP also faced downward pressure, but there was a glimmer of hope for the token. ProShares, an ETF provider, amended its filing for a spot XRP ETF on Tuesday, with plans to launch it on April 30. This amendment has provided a slight positive shift in sentiment toward XRP, though the token continued to show losses on the day.
On-chain data from CryptoQuant revealed that Bitcoin sales from large investors have slowed down since February. Large-scale selling activity has decreased significantly, dropping from a high of 800,000 BTC daily to around 300,000 BTC. This shift in selling activity has allowed some stability, though large investors are still not significantly increasing their positions.
Although Bitcoin’s price action has been driven largely by selling from big holders, accumulation has been weak. The monthly accumulation rate dropped sharply from 2.7% at the end of March to just 0.5%, indicating a lack of confidence among large investors in the current market conditions.
The market turmoil came as global macroeconomic uncertainty continued to grow, particularly in the U.S., where concerns about a potential recession have intensified. Despite the downward pressure on equities and crypto markets, Bitcoin’s role as a decentralized asset has remained attractive to some investors.
James Toledano, Chief Operating Officer at Unity Wallet, expressed concerns about a potential recession in the U.S., with economic growth projections being revised downward. “We haven’t reached the bottom yet, and many still believe the risks are underpriced in the equities market,” Toledano explained.
Despite the bearish sentiment, Toledano also noted that Bitcoin’s appeal as a hedge against traditional market volatility has been growing. “As traditional markets face uncertainty, Bitcoin continues to be seen as a store of value, though there are still considerable risks in the market, including for crypto,” he concluded.
