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##  [TL；DR]: 
In April, the cryptocurrency market turned from rising to falling, and "<a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> plummeted with $290,000 people selling," once ranked 31st on the hot search list, spreading pessimism.

Many observers attribute the reason for this round of downgrade to the weakening expectation of loose US dollar liquidity policy, the end of the positive speculation of Bitcoin halving, and the pressure on risky assets caused by the tense geopolitical situation.

If we look at it from a more macro perspective, the market is still in the growth stage. In the long run, technological innovation and application adoption in the crypto market are still advancing.

## Introduction
The cryptocurrency market experienced a significant decline last week, with Bitcoin and Ethereum prices experiencing a slight decline, while many Altcoins plummeted significantly, ending the frenzy. As the market approaches halving, why has the market been experiencing consecutive liquidation-style downturns, and is there still a possibility of a bull turn in the future? This article will delve into this in depth.
   
## Bitcoin Undergoes a Slight Pullback While Altcoins Plummet
The cryptocurrency market experienced a significant downturn last week, with "290,000 people selling out after Bitcoin plummeted," reaching number 31 on the hot search list.

Bitcoin experienced its largest volatility in over a month last week, plummeting from a peak of $72,774 to $60,172. Despite a subsequent rebound in the market, Bitcoin ultimately fell more than 10%.

Meanwhile, <a href="/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> also experienced an unstoppable decline, marking its largest intraday decline since November 2022. Although the decline narrowed at the close, it still exceeded 15%.

According to CoinGecko's data, the total market value of cryptocurrencies has dropped from the highest of $2,831.4 billion to the lowest of $2,417.5 billion in the past seven days, a decrease of over 14.6%.
 ![](https://gimg2.gateimg.com/image/article/17132596741.jpg)
Source: CoinGecko
 
From the details, there is more collective bloodshed from Altcoins, with some tokens falling more than 50% from recent highs, and the <a href="/price/gmx-gmx" target="_blank" class="blog_inner_link">GMX</a> of the bear market in the previous round hit a historic low.

According to The Block's data dashboard, the clearing volume of the Ethereum lending market in the first two weeks of April exceeded any month since June 2022. The clearing amount of the loan agreement <a href="/price/aave-aave" target="_blank" class="blog_inner_link">Aave</a> is close to $80 million, while the clearing amount of the <a href="/price/compound-comp" target="_blank" class="blog_inner_link">Compound</a> is close to $50 million, making up the vast majority of the clearing. The last month with a high volume of liquidation was June 2022, which was the month after the collapse of the <a href="/price/terra-luna" target="_blank" class="blog_inner_link">Terra</a> ecosystem worth $40 billion.

The sharp drop in the spot market has also triggered the liquidation of many speculative crypto positions, leading to significant fluctuations in the derivatives market.

According to Coinglass data, over $1.55 billion worth of bullish contracts were liquidated within 24 hours of a sharp decline last Friday and Saturday, with over 297,200 traders selling out.
 ![](https://gimg2.gateimg.com/image/article/17132597292.jpg)
Source: coinglass 

The downward fluctuation of the market has long been reflected in options-related data. Before the upcoming halving event, investor sentiment shifted towards nervousness, which contrasted sharply with the optimistic expectations of previous indicators.
 ![](https://gimg2.gateimg.com/image/article/17132597463.jpg)
Source: Amberdata
 
According to the latest report from Kaiko Research, the implied volatility of Bitcoin options has significantly increased in the past week, completely reversing the downward trend of the previous week. According to Adam McCarthy, an analyst at Kaiko Research, an increase in implied volatility often indicates a weakening of market participants' confidence in price movements. When implied volatility rises, traders are usually willing to pay a higher premium to protect their existing positions or engage in speculative trading to cope with potential price fluctuations, whether rising or falling.
 
## Exploring the Reasons for Market Decline
Currently, observers generally analyze the reasons for market decline from both macro and micro perspectives.

From a macro perspective, firstly, the recently released economic data shows an increase in inflationary pressure, which may lead to the Federal Reserve adjusting monetary policy. This uncertainty has impacted market sentiment and led to fund outflows.

The annual rate of US CPI for March, announced last week, was higher than expected and previous values, indicating an increase in inflationary pressure. Based on this data, the market believes that the possibility of the Federal Reserve lowering interest rates in June is reduced, and it is expected that the Federal Reserve will be more likely to maintain interest rates unchanged in the coming months. Although US President Biden still expects a rate cut within the year, he acknowledges that the new data may cause a delay in the rate cut.

Secondly, geopolitical tensions, especially the escalating conflict between Iran and Israel, have raised market concerns as investors turn to safe-haven assets, and cryptocurrencies are being neglected.

From a micro perspective, Bitcoin is about to achieve a halving. Although it has been positive in the long term, the market has overreacted to this in the short term. Meanwhile, Altcoins are more fragile than mainstream currencies and often become the preferred target for fund selling during market downturns.

According to the <a href="/price/flow-flow" target="_blank" class="blog_inner_link">Flow</a> data of US spot Bitcoin ETFs monitored by SoSo Value, the net inflow of funds on March 18 has significantly slowed, while the net outflow of funds shows signs of acceleration.
 ![](https://gimg2.gateimg.com/image/article/17132597994.jpg)
Source: SoSo Value
 
In addition, Bitcoin has completed seven consecutive months of positive monthly gains, which was not seen in the previous bull market. Currently, various technical indicators also show that the price has been severely overbought, and there is also a need for adjustment in the technical aspect.
 ![](https://gimg2.gateimg.com/image/article/17132598165.jpg)
Source:  https://www.gate.io/trade/BTC_USDT
 
Of course, if we refer to history, we can also clearly see that in the first three halving events, the market would make a small high before the halving, and then profit-taking would cause a short-term slight adjustment. This is also in line with past historical experience.
 
## Bull Market Outlook Before Bitcoin Halving
Currently, the crypto market is facing multiple challenges. The intensification of geopolitical risks has led to turbulence in financial markets, with investors turning to safe-haven assets such as bonds and the US dollar, while risky assets such as Bitcoin have been neglected. The market experienced a slight decline in this context and quickly evolved into a comprehensive liquidation.

As Chris Newhouse, an analyst at Cumberland Labs DeFi, pointed out, a slight price drop quickly became a comprehensive liquidation due to the correlation between all cryptocurrencies and risk assets.

Despite the recent sluggish trend of Bitcoin (BTC) and the gradual erosion of investor account value by other tokens, market analysts have observed that despite upward momentum, the selling momentum is not yet clear. They speculate that the selling pressure may come from the stablecoin market, while some institutions, such as BlackRock, are still actively buying and penetrating the market.

Presently, the focus of market attention is generally on the halving of Bitcoin, which has triggered panic in the market that cashing in coins will turn bearish, and many people are worried that the market will experience a large-scale sell-off.

However, if we look at it from a more macro perspective, the market is still in a growth stage, and in the long run, technological innovation and application adoption in the cryptocurrency market are still advancing.

For investors, the most important thing is to remain calm and patient. Before entering the shock wave stage, the market may go through multiple stages of selling, which is a window for seeking high-quality investment opportunities rather than a moment of fear. Long-term holders should have a long-term perspective and not be affected by short-term market fluctuations.

Faced with short-term fluctuations and long-term trends in the market, investors should maintain keen insight and rational judgment. We have also mentioned multiple times in previous blog posts that investing in cryptocurrencies is a long journey, requiring continuous learning, accumulation of experience, and improvement of one's investment literacy. Only in this way can we go further and more steadily on the investment path.



<div class="blog-details-info">
<div>Author:**SCarl Y.**, Gate.io Researcher
<div>Translator:Joy Z.
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>


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Last week, there was a decline in mainstream currencies and a sharp drop in Altcoins. As Bitcoin halving approaches, we will again interpret the current market trend.

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The Market is Plummeting, Will the Bull Market Still Come before Bitcoin Halving?