May was blacker for bitcoin than the 2020 coronavirus debacle

In terms of performance, May closes as one of the blackest months for bitcoin (BTC) in its history. On the last day of the month, the data indicates that the monthly percentage drop is 35.6%, a loss that represents the worst monthly performance of the cryptocurrency since September 2011, when the loss was close to 40%.

The bitter month of May even registered a loss greater than that suffered in March 2020 when the world was surprised by the global declaration of a coronavirus pandemic. At that time, the month closed with a decrease of 24.92% , despite the fact that the price fell by more than 50% in less than a week, after which now It is known as Black Thursday.

A chart from bybt.com shows how the monthly performance of bitcoin has fluctuated in the last eight years. During that period, the steepest fall is that of November 2018 with 36.5%, followed by that of May of this year . Then, in third place, there is the one registered in December 2013, with a decrease of 34.81% and that of January 2015 with a loss of 33.05%.

Monthly percentage performance of bitcoin in the last eight years. Source: bybt.com.

The fear, uncertainty and doubt (FUD) that has spread in the market today, impacted the price of the cryptocurrency more strongly than it did when panic was growing due to the rapid spread of the virus in 2020. It is due to the series of events that negatively influenced the price that hovered around USD 50,000 since the beginning of May .

Fear, doubt and uncertainty hit the price of bitcoin

It all started on May 12 after Elon Musk kicked off by announcing that Tesla would stop accepting bitcoin payments and adding critical tweets about how energy is used to mine the pioneering cryptocurrency. Then came an even bigger tsunami when China signaled that it would crack down on miners and ecosystem service providers.

Elon Musk’s criticisms sent an initial shock wave through the markets. This to the point that many of the users who had recently been motivated to invest in bitcoin, apparently decided to part with their funds after the change in attitude of Tesla , as reported by CriptoNoticias la last week.

Much of the supply that was flowing to exchanges to be settled was likely purchased between December 2020 and February this year. Even many sold at a loss , taking into account that most of the purchases happened when the price of bitcoin was at its all-time highs at $ 64,000, the note adds.

The large volume of sales of bitcoins was of such magnitude that the market will take time to recover, according to analyst Willy Woo. He added that an unprecedented level of long-term purchases by new investors would be required for the medium-term scenario to turn bullish.

In any case, as positive data You can consider that bitcoin tends to rebound from steep monthly drops. In fact, it happened last year, as after the March decline, had a return above 20% in most of the following months , thus compensating for the loss of May .

Another positive sign today is that the inflation that reflects the traditional market continues to haunt the whole world. Precisely these types of concerns have been driving the demand for cryptocurrencies as investors seek safe havens to limit their exposure to risk and losses in times of uncertainty and strongly bearish markets.

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