As an experienced financial analyst, I’m closely monitoring the recent developments in the Bitcoin (BTC) market with growing concern. The fresh multi-month lows that BTC hit on May 1, approaching $57,000, have cost traders over half a billion dollars in losses. These levels are the lowest since February and represent more than 20% Q2 losses for Bitcoin.
Bitcoin (BTC) reached new lows over the past few months, dipping below expected levels on May 1st, resulting in a significant loss of approximately $500 million for traders due to heightened market anxiety.
BTC price rout approaches $57,000
During the Asian trading hours, the price of Bitcoin as represented by data from CryptoMoon Markets Pro and TradingView, began to experience significant declines, with the BTC/USD pair dipping down to a low of $57,082 on Bitstamp.
This marked the pair’s lowest levels since February and took Q2 losses to more than 20%.
As a researcher studying the cryptocurrency market, I have observed that recent developments have negatively impacted investor sentiment. The hawkish fiscal policy shifts announced by US Treasury Secretary Janet Yellen have raised concerns about inflation and interest rates, potentially dampening the appeal of riskier assets like crypto. Additionally, the legal judgment against Binance and its founder Changpeng Zhao has added uncertainty to the market, further contributing to the negative sentiment.
In the past, CryptoMoon shared news of expectations that liquidity would increase due to Yellen’s actions. However, Yellen ultimately implemented measures that had the opposite effect, leading to a downturn in risk assets.
Financial commentator Tedtalksmacro stated in part of his reaction on X: “Instead of adding more liquidity to the market as Yellen had been doing, she opted to take it out.”
“Risk appetite takes a hit.”
Prior to the negative developments gaining momentum, there were already cautions issued regarding Bitcoin and other cryptocurrencies. The markets have been stagnant since Bitcoin reached its peak against the US dollar in mid-March.
As an analyst, I’ve noticed that the previous key support levels at $60,000 and the short-term holder realized price are no longer providing comfort to the bulls.
The other day, Rekt Capital, an experienced trader and analyst, advised his X subscribers: “If you find yourself in a state of panic, try to wait a bit longer before taking action. The support that has been in place for nearly two months might still hold.”
Based on recent developments, Charles Edwards, the founder of Capriole Investments – a quantitative Bitcoin and digital asset fund, outlined two potential directions he believed the Bitcoin price could take.
“‘Sell in May and go away.’ This looks like distribution to me,” he summarized in an X post.
“As long as we trade below $61.5K, scenario (1) is technically more likely. A strong reclaim of $61.5K would give some hopes to the bulls for scenario (2). A flush would also be good for the sustaining continuation of the bull market, the sooner we get one, the better the long opportunities are.”
Bitcoin liquidates $160 million in 24 hours
At present, real-time figures from monitoring tool CoinGlass indicate that crypto assets worth approximately $470 million have been liquidated over the past 24 hours.
Bitcoin accounted for $160 million of the total, with Ethereum (ETH) at $120 million.
Despite the April monthly close occurring before Bitcoin and the US Dollar (BTC/USD) dipped below $60,000, April 2024 marked the pair’s most disappointing performance since the depths of the 2022 cryptocurrency bear market.
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2024-05-01 11:38