Bitcoin experienced a turbulent season in May this year, for the first time since July 2021, when less than 800000 unique Bitcoin addresses were traded daily on the blockchain. This reduced activity is related to the market wide adjustments currently affecting Bitcoin and other digital currencies
Bitcoin experienced a turbulent season in May this year, for the first time since July 2021, when less than 800000 unique Bitcoin addresses were traded daily on the blockchain. This reduced activity is related to the market wide adjustments currently affecting Bitcoin and other digital currencies.
More background information: Bitcoin's unique address has plummeted, and there is a risk of BTC prices falling below $24000
However, an interesting aspect of this downturn is the elasticity of Bitcoin prices, which continue to maintain a relatively high position despite a decline in trading rates and have not fallen below the key resistance level of $25000, as many expected.
Prepare for the chaotic mid May
A prominent headline is the Federal Reserve's rise again, which was triggered by slightly higher than expected non farm payrolls in the United States. As we enter the second half of this month, speculative activity is rampant, and the problem is urgent - are bulls ready to rush back into the market?
Although Bitcoin has a promising outlook in April, it fell to a two month low by mid May. In view of the short release time of several key data, this bearish shift in market sentiment is not completely unexpected, thus injecting a certain degree of price uncertainty into the portfolio.
Monetary Policy Trends and Market Impact
In order to stabilize the economy, the Federal Reserve raised interest rates by 25 basis points after the expected increase in non farm employment from 180000 to 253000.
Subsequently, inflation fell to 4.9% in April, leaving market observers uncertain about the actions the Federal Reserve may take at its upcoming June meeting.
Is the future bleak?
Although some authorities said that if the US defaulted on its debt, Bitcoin might witness an influx of capital, the imminent risk of the US Treasury running out of its funds might lead to tight liquidity.
Please also read: Bitcoin Price Forecast: BTC Prices Are About to Fall by 50% - Coinpedia Fintech News
If major banks' predictions of a severe recession in the US economy in 2023 become reality and cryptocurrency prices remain highly correlated with traditional indices such as the Dow Jones and S&P 500, they may face a decline.
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