Bitcoin Hits Multi-Month Lows as Market Nerves Cost Traders Half a Billion Dollars
Summary:
Bitcoin (BTC) hit a multi-month low on May 1, resulting in losses of half a billion dollars for traders. Factors contributing to this fall include U.S. Treasury Secretary Janet Yellen's fiscal policies and a legal ruling against cryptocurrency exchange Binance. An analysis from Capriole Investments indicates two potential pathways for Bitcoin's price. Furthermore, total liquidations for cryptocurrencies in the past 24 hours were reported to be worth $470 million, with Bitcoin accounting for $160 million.
Bitcoin (BTC) reached new lows of several months on the first of May, leading to a half-billion-dollar loss for traders. The BTC/USD 1-day chart showed increasing losses during Asia's trading session, with BTC/USD hitting a low of $57,082 on Bitstamp. This has been Bitcoin's weakest performance since February, resulting in Q2 losses of over 20%.
The strict fiscal policies set forth by US Treasury Secretary Janet Yellen, coupled with a court ruling against cryptocurrency exchange Binance and its founder Changpeng Zhao, worsened overall cryptocurrency sentiment. Earlier, it was anticipated that Yellen's decisions might boost liquidity, but actions taken had the adverse effect, which negatively impacted risk assets.
Financial commentator Tedtalksmacro stated, “Instead of utilizing reserves to raise liquidity, Yellen has chosen to withdraw liquidity from the market, which undermines risk appetite.” Even before the decline accelerated, Bitcoin and other digital currencies received warnings. The market has been stagnating since BTC/USD attained record highs in mid-March.
Critical support levels are dwindling, with neither $60,000 nor realized prices providing comfort to the bulls. Popular trader and analyst Rekt Capital advised, “It's better to panic after the two-month-old support breaks down."
Charles Edwards, founder of quantitative Bitcoin and digital asset fund Capriole Investments, spoke about two potential paths for Bitcoin price. He analyzed the situation by saying: “‘Sell in May and go away.’ appears to me as distribution. If we trade below $61.5K, the first scenario becomes more valid. A strong jump back to $61.5K might rekindle hope for the bulls for scenario two."
CoinGlass's live data reported that the total liquidations for cryptocurrencies in the last 24 hours were worth $470 million, with Bitcoin accounting for $160 million and Ethereum (ETH) making up $120 million. Despite April ending before BTC/USD sank below $60,000, April 2024 was the worst performing month for the pair since the depth of the 2022 bear market. Note, this piece doesn't offer investment advice or suggestions. Any investment or trading decision involves risks, and individuals are urged to thoroughly research before making decisions.
Published At
5/1/2024 11:21:01 AM
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