Bitcoin (BTC) plummeted to new lows on May 1, causing traders to lose half a billion dollars and sparking market anxiety.
BTC/USD reached $57,082 on Bitstamp during the Asia session, marking its lowest level since February and resulting in a more than 20% loss for the second quarter.
The negative sentiment in the crypto market was fueled by hawkish fiscal policy moves from United States Treasury Secretary Janet Yellen, a legal judgment against crypto exchange Binance and its founder Changpeng Zhao. Yellen’s decision to withdraw liquidity from the market, instead of increasing it, had a detrimental effect on risk assets.
Warnings had already been issued for Bitcoin and altcoins prior to the downward trend, as the market had been stagnant since BTC/USD reached all-time highs in mid-March. Key support levels were now fading, and neither $60,000 nor the short-term holder realized price were providing any consolation for bullish traders.
Charles Edwards, founder of quantitative Bitcoin and digital asset fund Capriole Investments, analyzed the current events and suggested two possible paths for BTC price trajectory. He summarized one of the paths as “sell in May and go away,” indicating a distribution phase for Bitcoin.
In the past 24 hours, $470 million worth of cryptocurrencies were liquidated, with Bitcoin accounting for $160 million and Ethereum (ETH) for $120 million.
Despite April’s monthly close occurring before BTC/USD dropped below $60,000, it was still the worst month for the pair since the bear market in 2022.
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research before making any investment or trading decisions.