After 4 consecutive months in the green, Bitcoin (BTC) is likely to close the month of May on a red candle. The $30,000 technical and psychological resistance, as well as the immediate monetary uncertainty in the United States, will overcome the bullish movement that began in December 2022. What is the outlook for Bitcoin and the market?
Bitcoin: “Sell in May and go away”
Once again, the stock market adage “Sell in May and go away” brings balm to the heart of the bear camp. If we do not close the day on Wednesday, May 31 above $29,200, the first cryptocurrency should experience the market. the first month in the red since early 2023. At the time of writing, Bitcoin (BTC) is trading around $27,600 and it’s another day with little volatility.
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After a meteoric rise of 77% in the space of 4 months, going from $16,500 on January 1st to $29,200 on April 30th, BTC is breathing a bit and currently correcting 5% in May 2023. The psychological and technical resistance at $30,000 delayed the bullish breakout that started the cryptocurrency market from the new year.
The price of Bitcoin (BTC) decreased in May 2023
In return, Ether (ETH) is about to post a fifth month in the lock. As a result of the success of the Shapella update, the second cryptocurrency on the market is currently printing a timid – but significant – 1.78% in the space of a month. Over this period, the BTC/ETH pair fell by 7%.
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Unfavorable macroeconomic context
From the beginning of 2023, the macroeconomic context forced the US Federal Reserve (FED) to tighten its monetary policy. As the market awaits a downward pivot in key Fed rates in May, Chairman Jerome Powell explained that inflation was far from over and that monetary policy could remain restrictive for a long time to come.
In addition there is fear of the debt crisis, which pits Republicans and Democrats against each other. In short, if the public debt ceiling is not raised, the United States could no longer pay certain interests. Although this situation was finally resolved through a temporary agreement, a wave of panic renewed the ambitions of the cryptocurrency market.
However, this news, which investors consider positive, in no way erases the larger global problems faced by risky stock markets, especially the problems of cryptocurrencies. As you surely know, the fed is blowing hot and cold, the main indicator is the prime rates.
For this reason, several members participating in the major decisions of the US Federal Reserve spoke out in favor of yet another increase in these rates during the summer. According to them, the long awaited pivot – indicating a bullish recovery in the markets – which would not come before the beginning of the year 2024. So what color will the June candle be?
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Lilian Aliaga
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