Bitcoin Hits 2-Month Lows, Drops Below $60K Support

Bitcoin (BTC) experienced a significant drop in value on May 1, resulting in traders losing around half a billion dollars. During the Asia session, BTC/USD reached its lowest level since February, hitting $57,082 on Bitstamp. This decline marks a loss of more than 20% in the second quarter of the year. Several factors contributed to the worsening sentiment around cryptocurrencies, including hawkish fiscal policies from US treasury secretary Janet Yellen and a legal judgment against Binance and its founder.

Yellen’s decision to pull liquidity from the market instead of increasing liquidity had a negative impact on risk assets, including Bitcoin. Even before this decline, there were warnings about the potential downfall of Bitcoin and other altcoins, as they had been stagnant since reaching all-time highs in mid-March. Key support levels were fading, and neither $60,000 nor short-term holder realized price could offer any consolation to bullish investors.

Analysts and traders had different perspectives on Bitcoin’s price trajectory. Charles Edwards, the founder of Capriole Investments, suggested two possibilities. He believed that as long as BTC traded below $61.5k, the more likely scenario was a continued distribution of assets. If it reclaimed $61.5k, there might be hope for the bulls. Edwards also emphasized the importance of a market flush to sustain the continuation of the bull market and create better long opportunities.

In the midst of these price fluctuations, there were significant liquidations in the crypto market. Within 24 hours, $470 million worth of cryptocurrencies were liquidated, with Bitcoin accounting for $160 million and Ethereum for $120 million. Despite its dip below $60,000, the April monthly close marked the worst month for BTC/USD since the bear market in 2022. These events have added to the market’s volatility and uncertainty surrounding the future of Bitcoin.