After 4 consecutive months in the green, Bitcoin (BTC) is likely to close the month of May on a red candle. The technical and psychological resistance of $30,000, as well as the immediate monetary uncertainty in the United States, will have overcome the bullish movement that began in December 2022. What is the outlook for Bitcoin and the market?
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Bitcoin (BTC) – Premier mois dans le rouge depuis décembre 2022
Bitcoin: “Sell in May and go away”
Once again, the stock market adage “Sell in May and go away” gives balm to the heart of the bear camp. Unless we close the day on Wednesday, May 31 above $29,200, the first cryptocurrency on the market should therefore experience the first month in the red since the start of 2023. At the time of writing, Bitcoin (BTC) is trading around $27,600 and has another day punctuated by very little volatility.
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After a meteoric rise of 77% in the space of 4 months, going from $16,500 on January 1 to $29,200 on April 30, BTC is breathing a little and is currently correcting by 5% in May 2023. The psychological and technical resistance at $30,000 has slowed the bullish breakout that the cryptocurrency market has started since the new year.
The price of Bitcoin (BTC) declines in May 2023
In return, Ether (ETH) is about to post a fifth month in the green. In the wake of the success of the Shapella update, the second cryptocurrency in the market is currently printing a timid – but appreciable – 1.78% in the space of a month. Over this period, the BTC/ETH pair fell by 7%.
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An unfavorable macro-economic context
Since the beginning of 2023, the macroeconomic context has forced the US Federal Reserve (FED) to tighten its monetary policy. As the market waited for a downward pivot in the Fed’s key rates in May, Chairman Jerome Powell explained that inflation was far from over and that monetary policy could remain restrictive for many more months.
Added to this are fears around the debt crisis, which opposes Republicans and Democrats. In short, if the public debt ceiling is not raised, the United States could no longer honor the payment of certain interests. Although this situation was finally resolved through a temporary agreement, a wave of panic refreshed the ambitions of the cryptocurrency market.
Nevertheless, this news perceived as positive by investors does not in any way erase the more global problems encountered by risky stock markets, in particular that of cryptocurrencies. As you certainly know, it’s the FED blowing hot and cold, the main indicator being key rates.
On this subject, some members participating in the major decisions of the US Federal Reserve have spoken out in favor of yet another hike in these rates over the summer. According to them, the long-awaited pivot – signifying a bullish recovery in the markets – would not arrive before the beginning of the year 2024. So, what color will the June candle be?
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Journalist for Cryptoast, I strive to dissect every detail of the exciting world of cryptocurrencies and make it accessible and understandable to as many people as possible.
Lilian Aliaga
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