News
07
May
market review

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The crypto market is not showing signs of strength

Bitcoin’s price has risen from last week’s dip, but its direction still looks uncertain. The altcoin market is split roughly 50-50 between winners and losers.

Bitcoin’s price recovered from last week’s crash

Bitcoin’s price is around $63,700 when writing this article. The price was at $66,300 at the time of our previous market review, which means there has been a decline of about four percent in two weeks.

You can see the Bitcoin price development with daily candles in the graph below. The blue trendline is the 50-day average, and the purple trendline is the 200-day average.

btc-0705

Investors were spooked a week ago when Bitcoin’s price fell through the bottom of the consolidation channel shown in the picture. The price had tested the channel bottom level several times before, so it wasn’t that surprising the support level finally broke.

Many traders expected Bitcoin to fall to $52,000, where the price should have the next support level. However, the price turned upward from around $56,500 on Thursday. On Friday, we saw a green candle of 6.5 percent, which brought Bitcoin’s price back to above $62,000.

Bitcoin is currently drawing a worrying “lower highs & lower lows” pattern, as seen in the graphic below. This means that the bottom of each dip is lower than the previous one, and each price moves upward and cools down earlier than the previous one.

btc-highs

Such a pattern is very typical in bear markets. If the price turns down again and breaks the bottom of the consolidation channel, we will probably drop to $52,000. To break this “lower lows” trend, Bitcoin’s price should rise above $67,000.

In the big picture, nothing has changed much since the last market review. Investors are still waiting for the Fed to cut interest rates, but this operation is rescheduled as inflation remains stubbornly above the target level.

At the same time, weak economic data comes from the United States. Consumers’ purchasing power is weakening significantly, and unemployment is rising. In recent weeks, there has even been talk of stagflation, i.e., the worst possible economic scenario.

May also begins a historically weak period on the stock market, where the saying “Sell in May and go away” comes from. The same applies to Bitcoin’s price development; the four-month period between June and September contains the three weakest months of the year.

The table below shows Bitcoin’s price development in the summer months since 2013. The gray box shows the average price performance in each month. February, March, April, October, and November are the best months, with 13% to 47% average returns.

btc monthly

Data source: coinglass.com/today

It would not be surprising if Bitcoin continued to move sideways or slightly decline until the fall. Although last year was excellent for Bitcoin, the price moved horizontally from March to the end of October. Practically all price rallies were seen during Q1 and Q4. Investors should prepare for an equally dull summer this year as well.

Many winners and losers in the altcoin market

The altcoin market is split pretty much 50-50 to winners and losers compared to Bitcoin. The best gains in the Top 100 list are less than 30 percent (vs. BTC), so there haven’t been any major movers in the past seven days.

This time, many cryptocurrencies in the top 15 list have also beaten Bitcoin’s price performance by a clear margin. See the chart below, which shows the top 15 cryptos and their price vs. Bitcoin in the past 24 hrs, 7 days, and 30 days.

alts-0705

Last week’s decline mainly explains the price performance of Solana, Avalanche, and Polkadot. Many altcoins fell significantly compared to Bitcoin last Tuesday, and now they have recovered back faster than Bitcoin.

Ethereum’s weak performance is the most worrying in the top 15 list. The price of Ethereum continues to fall compared to Bitcoin, and the trend doesn’t seem to change for the better. The decline has continued for more than a year. Ethereum’s strength vs. Bitcoin has traditionally signaled the start of a broader altcoin bull market.

The biggest gainer in the top 100 list is Render Network’s RNDR token, which has risen 34 percent vs. Bitcoin. There seems to be no more significant reason for this than that Render Network participated in the same event as NFT artist Beeple.

The second biggest mover is the controversial Worldcoin. The collaboration with Open AI and PayPal might have boosted its WLD token. Open AI founder Sam Altman is also behind Worldcoin. The price of the WLD token has increased by 28 percent compared to Bitcoin during the previous week.

The third coin we mention this week is the DogWifHat (WIF). The super popular meme coin on the Solana platform is up more than 23 percent against Bitcoin. WIF has tenaciously maintained its position in the top 50 list of cryptocurrencies despite the bear market of the last few months.

DogWifHat currently has a market cap of $3.2 billion. It is the fourth largest meme coin in the market after Dogecoin, Shiba Inu, and Pepe.

As a whole, there is no major news on the crypto market this week.

AboutBitcoin Team

Hey! We're the AboutBitcoin squad, a team of crypto lovers who've been all about cryptocurrency since 2017. Every week, we drop the latest news and cool insights from the crypto world. Come hang with us as we dive into the crazy, ever-changing scene of cryptocurrencies – it's gonna be an awesome adventure!