The cryptocurrency market experienced a major turning point in April, reversing its seven-month upward trend. Behind this decline lies the increase in geopolitical tensions and the slowdown in investments in spot ETFs listed in the USA. This caused digital assets to lose value and trading volumes to decrease significantly.

According to the report of London-based digital assets data provider CCData, the total transaction volume in spot and derivative markets decreased by 43.8% to $6.58 trillion, from the record level of $9.12 trillion in March. This decline created a cold shower effect in the market and showed that investors’ appetite had decreased.

Derivatives markets were the first area where investors retreated because they were exposed to high volatility. Activity in the futures and options market fell 47.6% to $4.57 trillion. This significant decrease shows that derivatives markets are no longer as attractive to investors as they used to be.

The spot market, on the other hand, experienced a relatively more controlled decline. Spot market volume decreased by 32.6% to $2.01 trillion. This situation reveals that investors have not completely turned their backs on cryptocurrencies, but have taken a more cautious approach.

In its report, CCData listed some factors that caused this decline. Investors began to act more cautiously in the face of unexpected macroeconomic data affecting the markets. These data shook the confidence in the short-term value increases of cryptocurrencies. The exacerbation of the geopolitical crisis in the Middle East has created uncertainty in global markets. This uncertainty has made investors more sensitive to risk and led them to move away from cryptocurrencies. The slowdown in investments entering US-listed spot Bitcoin ETFs has limited the inflow of new funds into the market. This situation disrupted the balance of supply and demand, causing cryptocurrencies to lose value.

Bitcoin (BTC), as the leading cryptocurrency in terms of market value, was the asset most affected by this decline. Bitcoin price fell almost 15% in April, falling below $60,000. From here we understand that the seven-month upward trend has ended and a correction period has begun in the market.

This decline in Bitcoin is caused by many factors. The overheated bull market has investors turning to profit-taking. Tensions in the Middle East and the decreasing likelihood of interest rate cuts in the USA increased the risk aversion tendency in the market. The strengthening of the dollar index contributed to the decrease in the attraction towards cryptocurrencies.

CoinDesk 20 Index, which measures the overall crypto market value, also had its share of these declines. While the index lost almost 20% of its value, the total crypto market cap fell 16.8% to $2.177 trillion. Binance, which maintains its leadership in transaction volume among cryptocurrency exchanges, was also not affected by these declines. The total market share of spot and derivative markets decreased to 41.5%. Binance’s spot market transaction volume decreased by 39.2% to $679 billion in April. This was the first decline for the stock market since September 2023.