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Bitcoin is on track for the second largest monthly percentage decline on record, despite rebounding session lows in Asia.
The cryptocurrency changed hands for nearly $ 36,200 at 9:00 a.m. UTC, which was a 37.5% loss for the month of May. Prices hit a low of $ 34,195 early in the day.
The monthly drop beats the 37% drop seen in November 2018 and is just short of the record 40% drop in September 2011, according to Bitstamp data.
Ether, the second largest cryptocurrency by market value, is on track to end May down 12%, the first monthly loss since September 2020. Meanwhile, gold has gained 7% , its biggest monthly rally since July 2020, and the S&P 500 was little changed on the month, according to data provided by TradingView.
The bitcoin market looked weak earlier this month amid continued sales of whales or large investors able to make or break price trends. The move dashed hopes for widespread business adoption sparked by the automaker’s decision to adopt bitcoin in February.
Bitcoin rose from $ 58,000 to nearly $ 30,000 in the eight days leading up to May 19 and has traded sideways since, with a rise capped by the 200-day Simple Moving Average (SMA) to just over $ 40,000.
According to blockchain analytics firm Glassnode, the fall in prices was mainly due to panic selling by new investors who bought coins during the first quarter’s bull run. Meanwhile, holders and institutions bought the decline as a sign of confidence in the cryptocurrency’s long-term price outlook.
The supply held by whale entities in address clusters controlled by a single network participant holding at least 1,000 coins increased by over 25,000 BTC to 4.149 million since May 19.
Going forward, accumulation supported by large investors may be necessary to restore market confidence. The number of whale features increased along with the price between October and February.
Charts analysts are forecasting a recovery in near-term relief as the sell looks exaggerated.
“Bitcoin is newly oversold on a medium-term perspective, and today there is a new short-term ‘buy’ signal from the DeMARK indicators that supports a two-week rebound,” said Katie Stockton, Founder and Partner director of Fairlead Strategies, said in a weekly research note released Monday.
DeMark indicators compare the most recent maximum and minimum prices to the equivalent price of the previous period to measure the demand for the underlying asset.
Stockton, however, said the rebound is likely to be short-lived as medium-term momentum is on the downside, as indicated by the negative reading of the MACD weekly histogram.
The overall bias remains bullish, with Ray Dalio, founder of Bridgewater Associates, preferring to hold bitcoins over bonds in an inflationary environment.
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