Bitcoin is facing its first monthly decline of 2023, as the cryptocurrency market struggles to maintain its momentum after a brief recovery earlier this year. According to Coin Metrics, Bitcoin lost about 4.6% of its value in May, ending the month at around $26,950. This is the worst monthly performance for Bitcoin since November 2022, when the FTX exchange collapsed and triggered a massive sell-off in the crypto space.
The main factors behind Bitcoin’s slump include the rising interest rates by the Federal Reserve, which have dampened the appeal of alternative assets, and the increasing competition from other cryptocurrencies and blockchain applications, such as Ether and Ordinals.
The latter are a new type of non-fungible token (NFT) that use the smallest unit of Bitcoin to store media on the blockchain. While some see Ordinals as a way to expand Bitcoin’s use cases and network activity, others argue that they deviate from Bitcoin’s original purpose as a peer-to-peer electronic cash system.
Despite the monthly loss, some analysts remain optimistic about Bitcoin’s long-term prospects, citing its strong fundamentals and growing adoption by institutional and retail investors. They also point out that Bitcoin is still up more than 60% since the start of the year, and that volatility is a natural feature of the crypto market.
However, others warn that Bitcoin may face further challenges in the coming months, such as regulatory uncertainty, environmental concerns, and technical issues. – Bitcoin is facing increasing competition from other cryptocurrencies that offer faster transactions, lower fees, and more privacy.
Bitcoin’s dominance in the market has declined from over 80% in 2017 to less than 40% in 2023, as more investors diversify their portfolios with alternative coins. Bitcoin’s scalability issues have not been resolved despite several attempts to upgrade the network, such as SegWit and Lightning Network.
Bitcoin’s environmental impact has become a major concern for regulators and consumers, as the network consumes more electricity than some countries and generates a large carbon footprint. Bitcoin’s volatility and security risks have deterred some institutional investors and mainstream adoption, as the price fluctuates unpredictably and hackers target exchanges and wallets.
Bitcoin Real-Time (BRTI) is an index that tracks the price of bitcoin across major exchanges in real time. In May 2023, BRTI showed a volatile and bearish trend, with several candlestick patterns indicating a reversal or a continuation of the downtrend.
Some of the notable patterns that occurred in May 2023
Engulfing Bearish (1M): This pattern formed at the end of May, suggesting a strong selling pressure and a possible change in the trend direction.
Doji Star Bearish (1M): This pattern formed in February and was confirmed in March, indicating indecision and uncertainty among traders and investors.
Three Inside Up (1D): This pattern formed on May 26, signaling a bullish reversal after a downtrend. However, it was not followed by a strong upward movement and was soon overshadowed by the Engulfing Bearish pattern.
Evening Doji Star (15): This pattern formed on May 29, indicating a bearish reversal after an uptrend. It was followed by a sharp decline in the price.
The chart movement of BRTI in May 2023 reflected the overall sentiment and events in the crypto market, such as the launch of Ethereum’s Shanghai upgrade, which improved its scalability and reduced its gas fees, boosting its price and popularity. Lastly, the increased regulatory scrutiny and crackdown on crypto exchanges and mining operations in China, which caused fear and uncertainty among crypto investors and miners.
