Bitcoin’s Roller Coaster Ride Hits the Bottom
Yesterday, the cryptocurrency’s price crashed to its lowest point since February 27, kicking off Thursday’s trading at $57,405. The slump has gone on for a third straight day, fueled by fading hopes that the Federal Reserve will cut rates in the near future.
May – The Unlucky Calendar for Crypto
In the 13 years we’ve watched Bitcoin dance, May has proven to be a bit of a party pooper. On average, the digital gold drops around 20% during this month.
Mining: A Centralized Circus
- Even after block rewards were halved, Bitcoin mining hasn’t shown signs of weakness.
- Dangerously, one organization now holds 47% of the network’s hash rate across nine major pools.
Unfavorable “ETF” Flow
Bitcoin exchange‑traded funds have siphoned out capital for five days straight. Since their launch on January 11, the cumulative outflow has reached $11.94 billion. April saw a multi‑directional flow.
Legal Lull and Prison Penalties
The new U.S. crypto‑payment law could let banks such as JPMorgan jump into the “crypto” playground, but it’s unlikely to lift Bitcoin’s spirits right away. Meanwhile, former Binance CEO Changpeng Zhao’s four‑month jail sentence—requested by the U.S. Department of Justice—has added extra downward pressure.
Interest Rates & Dollar Dominance
Higher rates have bolstered the dollar, squeezing Bitcoin. The Federal Open Market Committee worried about inflation but didn’t rule out cuts. Such optimism—or lack thereof—can swing Bitcoin’s price dramatically.
Market Sentiment and the All‑Time High Crash
This week, Bitcoin fell more than 10% from its March highs, marking April 2024 as its worst month since November 2022. Futures markets in Hong Kong stayed flat, hinting that a resurgence might come later in the year.
Short‑Term Outlook
- Expect another dip in the coming weeks, as market pressures and geopolitical events loom.
- Bitcoin may stabilize for a month or two, trading within a $10,000 volatility band.
- Eventually, the halving’s supply reduction could provide a positive boost, in the latter months of this year or early next year.
