May has been rough for cryptocurrencies. Only September 2011 has been worse for Bitcoin when prices dropped by 40%. However, when this happened when 1 BTC was trading below $5.
Things have calmed down recently. Despite relatively low volatility, it has been an increasingly interesting time at cryptocurrency markets. BTCUSD was oscillating between $35k and $40k last week. The pair started at $34,738 last Monday and is trading around $36,746 at the moment.
The environmental issues related to the high carbon footprint of BTC mining and transactions have spun other bearish arguments. Possible tightening of regulations in the US and China.
Bitcoin had been under a lot of pressure recently. Some analysts are undermining that BTC is the best hedge against inflation, as well as its role as an alternative reserve currency, both on the premise of high volatility. Which ironically led to a relative stabilization of BTCUSD in the last weeks of May.
Michael Hsu, the new Office of Comptroller of Currency (OCC), declared in an interview for “Financial Times” that the agency is planning to go away from the lenient attitude towards crypto ran during the presidency of Donald Trump.
Meanwhile, the Ethereum price has been much more dynamic. Although ETH has been equally hit by environmental concerns, the fundamentals for the dynamic growth in the first half of May remained strong.
While Tesla’s support for BTC disappeared from day to day, Ethereum-based ecosystems are still developed by corporations or startups backed by top financial companies. The promise of the upcoming migration to proof-of-stake-based ETH 2.0 gives the cryptocurrency even more momentum.
ETHUSD bounced back strongly going up over 38% in the first three days of the week. Then it lost most of these gains in the next two days, only to rebound through Sunday and Monday.
Expect high volatility and strong few-days long trends on ETHUSD this week. While BTCUSD seems to be more difficult to crack in the near future if you get any technical or fundamental insights on whether an uptrend or downtrend can be formed. Trade accordingly. The recent decorrelation of Ethereum and Bitcoin prices against the dollar give even more opportunities to PrimeBit traders. Good luck!