Altcoins usher in a "new 519", which is the main reason for the turbulent situation or the tax deadline?

In April, less than a week is expected to pass before the fourth Bitcoin "halving", but in the generally optimistic market sentiment, the market has once again seen a sharp decline. $70,000 seems to have become a difficult barrier for Bitcoin to overcome. After multiple failed breakthroughs, it has once again ushered in a rapid decline, reaching $60,000 last night.

Affected by this, the crypto market has once again ushered in a liquidation amount of over 100 million. According to Coinglass data, in the past 24 hours, the entire network has liquidated $935 million, of which long orders have liquidated $753 million and short orders have liquidated $182 million.

Of course, compared with the violent fluctuations in the past bull market, the price retracement of Bitcoin this time is not very serious, only less than 10%, but the days of altcoins led by ETH are not so good.

Affected by Bitcoin, the price of Ethereum fell below the $3,000 support level for the first time in the recent retracement, while Solana, which had previously risen fiercely, has been weak after the network congestion. In this retracement, SOL fell below $140, which has fallen by more than 30% from the high point. The rest of the mainstream, low-end or newly launched altcoins were almost all spared, and the crypto market was a bloodbath. The sudden plunge left most investors scratching their heads and they could only resort to "hints from the universe" (see the right picture).

Unlike in the past, the outflow of Bitcoin ETF does not seem to be the main cause of this sharp drop. On April 13, according to HODL15Capital data, the US Bitcoin spot ETF had a net outflow of US$55 million yesterday, of which GBTC had a net outflow of US$166 million yesterday, BlackRock IBIT had a net inflow of US$111 million, and Fidelity FBTC had a net inflow/outflow of 0 yesterday. In fact, the net outflow of ETFs has been shrinking over the past week.

In the previous week, although the market had fallen several times, the overall bullish market sentiment was not affected. For the crypto market after April, the market generally believes that it will usher in an upward trend.

Matrixport analyst Markus Thielen also published an article on March 29 to convey his optimism about the April market. He believes that Bitcoin has risen sharply for seven consecutive months and may continue to rise by 12% to US$84,000 in April along the price of US$70,000. Zhu Su, co-founder of Three Arrows Capital, also recently said on social media, "I really don't understand the reason for being bearish here. April is structurally extremely bullish. Bitcoin halving is coming, Ethereum ETF is about to be launched, and ordinary people are waking up from a long slumber. There is no NFT at this year's Art Basel. We are still in the early stages."

It is worth noting that on April 13, gold prices also experienced a violent correction after rising for several weeks in a row. The price once fell back by nearly $100. The cashing out of profitable investors and the unrest in some parts of the Middle East were considered to be the main reasons behind it.

In addition, BitMEX co-founder Arthur Hayes predicted at the beginning of this month that the market may be extremely weak in mid-April, and the real bull market will start in May.

According to Arthur Hayes' latest blog post "Arthur Hayes: The Real Crypto Bull Market Will Start in May", from mid-April to early May, the US taxation will withdraw market liquidity, and the Fed's continued balance sheet reduction may cause the market to be extremely weak. But starting May 1, a new round of crypto bull market is expected to start as the Fed slows its balance sheet reduction and the U.S. Treasury uses funds to stimulate the market.

Hayes pointed out that the Fed has "transfused" the banking system in disguise by relaxing bank capital requirements, allowing it to hold more Treasury bonds. The U.S. Treasury has also been issuing more short-term Treasury bonds to absorb trillions of dollars of idle funds in the Federal Reserve Bank's reverse repurchase facility. Both measures are conducive to improving market liquidity.

However, Hayes expects that the April 15 tax deadline will withdraw a lot of money from the system. At the same time, the Fed is still continuing to reduce its balance sheet by $95 billion per month. Coupled with the fact that Bitcoin's expected block reward halving on April 20 may cause short-term oversold, it will bring huge pressure to the market.

Hayes advises investors to act cautiously in April and be bold after May. He revealed that he has closed his positions in MEW, SOL, NMT and other tokens and made profits, and transferred the funds to the USDe stablecoin on the Ethena platform for staking. Hayes said that if he can avoid the risk of losses in April, he will have enough ammunition to establish various crypto asset positions in May and fully enjoy the bull market dividends.

Now it seems that Lao Hei has once again guessed the direction of the market.

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