Despite recovering off session lows in Asia, Bitcoin is on track for the second-largest monthly percentage fall on record. According to Bitstamp data, the monthly dip outperforms the 37 percent reduction experienced in November 2018 and falls just short of the record 40 percent plunge in September 2011.
Ethereum, a cryptocurrency, rose more than 6% to $2,573 on Monday. The second-largest cryptocurrency is set to lose 12% in May, the first monthly loss since September 2020. Meanwhile, gold has risen 7%, its largest monthly gain since July 2020, while the S&P 500 is little changed on the month, according to TradingView data.
May reasons why Bitcoin fell in the Month of May?
With inflation causing concern in conventional markets and summer months generally favorable to bulls, there may still be the reason for optimism. However, anything can happen in Bitcoin, and shocks might come in both directions. China's recent regulatory measures, as well as concerns over the Federal Reserve's early withdrawal of support. The cryptocurrency suffered a setback as Tesla refused to accept bitcoin as payment, citing environmental concerns. The decision shattered hopes for wider business adoption that had been sparked by the carmaker's decision to adopt bitcoin in February.
Bitcoin fell from $58,000 to over $30,000 in the eight days leading up to May 19 and has since traded sideways, with the upside blocked by the 200-day simple moving average (SMA) at a little around $40,000.