Bitcoin collapsed in May by 35% - what's next?
Bitcoin ended one of the worst months in history, losing 35.5% in May.
This is the third percentage decline in the price in history.
Only November 2018 (-37%) and September 2011 (-40%) were worse.
Ethereum lost 6% at the end of the month, Binance Coin - 45%, XRP - 37%, Dogecoin-2%. The only cryptocurrency in the top ten that showed growth was Cardano (+23%).
Several factors contributed to the decline in the crypto market: Elon Musk's statement about stopping sales of Tesla for bitcoins, China's aggressive rhetoric against mining and cryptocurrencies, and the US intention to impose taxation on bitcoin transactions. In addition, the US Federal Reserve announced the acceleration of the project to create a digital dollar.
According to analysts at Glassnode, the decline was caused by panic selling by recently joined investors who bought coins in a bullish phase in the first quarter.
Long-term and large holders, on the contrary, increased their positions. Thus, the volume of coins in clusters of addresses containing from 1000 BTC increased by more than 25,000 BTC to 4,149 million.
Analysts of Chainalysis pay attention to the surge in activity last week of large investors or so-called "crypto-whales". They purchased 77,000 BTC in a week.
The largest surge in investor buying activity was observed on May 23, when bitcoin fell below $30,000 in the short term. At the same time, the biggest losses were incurred by those players who recently entered the market. 1.2 million BTC were sold at a loss of 5% to 25%.
The market has entered a prolonged consolidation phase, and the range of $33,000 - $40,000 may remain until the end of the summer, some experts believe. Others believe that by the beginning of autumn, bitcoin will return to the $50,000 mark, and by the end of the year it may reach $100,000.
Bloomberg strategist Mike McGlone and Funstrat analyst Tom Lee predict that by the end of this year, the bitcoin exchange rate will reach $100,000.
TV host and founder of Heisenberg Capital Max Kaiser expects that in the second half of 2021, BTC will grow by 500% and reach $220,000.