Bitcoin drops to $ 38,000; What will be the market situation in the next 30 days?

The market situation in May of previous years was mostly upward. This year, however, the market is experiencing different conditions and the return on bitcoin has been negative since the beginning of 2022. Given this, will the good price performance in May from previous years be repeated this time?

According to Quinn Desk, Bitcoin started a new downward movement from its highest value of $ 40,200 yesterday, after falling prices on the world stock market.

Most of the market-leading instruments performed worse than bitcoins in the last 24 hours, indicating that with market risk fluctuations, investor risk-taking has also declined. Atrium, for example, has fallen more than 5 percent in the past 24 hours, and Olench has fallen 6 percent; Meanwhile, bitcoin lost about 4 percent of its value over the same period.

The S & P500 also fell on Friday and is now on the verge of its worst annual start of $ 1942. Meanwhile, the price of gold on world markets has risen in the last 24 hours, and the jump of 6% in the last six months remains unchanged.

Bitcoin is lagging behind the stock market and gold this year

Bitcoin has outperformed the S&P 500 and gold since early 2022. However, as the chart below shows, this digital currency has outperformed US government bonds over the four-month period. Financial markets have generally been at risk since early 2022, stemming from growing tensions between Russia and the West (over the war in Ukraine) and macroeconomic factors.

At times when investor confidence is declining, market participants are reducing the share of risky assets such as digital currencies and stocks in their portfolio. In such cases, an increase in bank interest rates usually leads to a decrease in bond yields. On the other hand, gold and other assets that are considered “commodities” often become more valuable as inflation increases.

The price trend of bitcoin since the beginning of this year is unstable and without a clear direction, and the average axis of these fluctuations is the level of 40,000 dollars. Despite the negative return on bitcoin since the beginning of this year, the price of bitcoin is still 16% higher than the minimum value of $ 33,000 registered on January 24. The S & P500 is now at its lowest level since early 2022.

Bitcoin drops to $ 38,000;  What will be the market situation in the next 30 days?
Compare the pricing of bitcoin and other world-famous assets.

The bloodbath of digital currencies in the last month

The chart below shows the return of the 20 digital currencies on the market over the last 30 days, which is negative for all currencies on this list.

The index, called CoinDesk 20, examines the state of thousands of digital currencies based on market value, trading volume and several other indicators, and the results are a group of 20 of the most important market currencies. 99% of the trading volume of the 8 largest exchange offices in the world is dedicated to these 20 digital currencies.

Over the past 30 days, Dodge Quinn had the best performance among the 20 currencies on this list, the main reason being the 20% jump in the price of this token last week; The jump came after he accepted Ilan Musk’s offer to buy Twitter. Meem Quinn has changed much of its recent growth, but still performs much better than Shiba Ino, which has seen a price drop of 18% over the period.

Atrium Classic, the digital currency that emerged after the split of the Atrium Network in 2016, has the worst performance on the list. This digital currency had the best performance among 20 currencies on this list in March.

Atrium and Bitcoin experienced lower sales pressures in April than other market currencies. Altcoins tend to perform worse in declining markets because they require more risk-taking than bitcoins. Therefore, it can be said that the risk of market participants has decreased this month.

Bitcoin drops to $ 38,000;  What will be the market situation in the next 30 days?
Negative return on the 20 best currencies on the market in the last 30 days.

It seemed like a good month most of the time

The question that has been on the minds of traders with the approach of early May is whether the fall in prices in April could lead to a boom in the market in May.

The top of the chart below shows the average monthly return on bitcoins throughout history. The bottom of the image also shows how much bitcoin has returned positively each month for the past nine years.

Bitcoin has historically had an average return of 17% in May each year. The historical performance of the stock market was also strong in May of previous years and this problem may encourage buyers to re-enter the market after 3 months of limited price fluctuations.

It is very important to note that the presentation of prices in previous years cannot be a guarantee that the same will happen again in the future. For example, technical indicators show a continuation of transverse fluctuations and price stabilization in the future, which, of course, may be accompanied by a limited increase in prices. At the same time, the feelings of derivatives traders are not the same.

Bitcoin drops to $ 38,000;  What will be the market situation in the next 30 days?
The graph of the average bitcoin return in different months (upper part) and the percentage of bitcoin returns for one month were positive (lower part).

Post Bitcoin drops to $ 38,000; What will be the market situation in the next 30 days? appeared first for currency.

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