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Bitcoin suffers worst monthly drop since September 2011
Olumide Adesinaby Olumide Adesina May 29, 2021Reading Time: 2 mins read
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The Crypto market had a sour month of May and it remains to be seen if the flagship crypto asset, Bitcoin, can recover any serious gains for the remainder of its worst trading month.
Bitcoin lost near 10% of its value on Friday and at the time of drafting this report had lost about 36% in value for the month of May, its worst monthly performance since September 2011.
Recall that on the 19th of May, the digital asset suffered one of the most significant liquidity crises following a multi-month-long consolidation above $50k. Bitcoin’s worst sell-offs on May 19 posted the largest daily candle in Bitcoin history with an intra-day price range of about $11,500.The dramatic plunge created more panic across the market spectrum with Bitcoin staying below $40,000 price levels.
Crypto pundits say a cascade of bad news sent the market spiralling downwards since it hit an all-time high in mid-April. Negative sentiments strengthened when Tesla’s CEO, Elon Musk, told his followers via Twitter that the biggest electric-car maker will no longer accept Bitcoin as a means of payment because of concerns about its mining process that accounts for high carbon footprints.
Weakened institutional buying played its part, with wealthy investors pulling a significant amount of their funds into traditional safe-haven assets like gold, as they pondered on Bitcoin’s erratic price swings. This led to heightened disinterest in buying the dip, despite Bitcoin falling below $40,000.Some crypto critics see the most popular crypto asset plunging as low as $20,000 at the worst-case scenario, yet, some market pundits say the flagship crypto remains skewed to the upside with the weekly trend of higher lows still in play.
The crypto market had already lost more than $600 billion in market value, with millions of investors liquidated amid strong selling pressures. Bitcoin has seen its dominance level hit a record low of around 42.5%.Leading altcoins like Ethereum posted record losses as they dropped nearly half their value in the month of May after posting record highs some weeks ago. Cardano, Dogecoin, Internet Computer, XRP and Polkadot have plunged by more than 50% of their market value.