May has been a rough month for the cryptocurrency market, and according to data from TradingView, the crypto market has lost approximately $500 billion in market value so far in May.
Bitcoin’s value fell by more than half its value since its November 2021 peak, which caused the entire cryptocurrency market to collapse.
Markets have been suffering from heavy selling due to the Federal Reserve aggressively tightening its monetary policy to combat inflation, and according to Mike Novogratz, CEO of Galaxy Digital, the cryptocurrencies could decline another 70%.
Central banks also remain highly critical of crypto; Christine Lagarde, president of ECB, said this month that cryptocurrencies don’t have value. Sweden’s Riksbank reported that cryptocurrencies weren’t money and warned that cryptocurrencies pose challenges to financial stability.
Chris Burniske, a partner at the crypto-focused venture capital firm Placeholder Ventures, said that a bottom in the crypto markets could be expected in the back half of 2022.
According to Chris Burniske, inflation could start to “mellow out” towards the end of the year, and 2023 could be a great year for cryptocurrencies.
J.P. Morgan strategist Nikolaos Panigirtzoglou said that Bitcoin is currently trading significantly below its fair price, and he sees significant upside for the future. J.P. Morgan strategist Nikolaos Panigirtzoglou added:
Despite the recent market dip that saw Bitcoin reenter the $28,000 range, the bank has maintained a positive outlook. Going forward, we see upside for Bitcoin and crypto markets more generally.
Time to invest in cryptocurrencies?
If you decide to invest in cryptocurrencies in June 2022, you should have Bitcoin on your “watch list” because the prices of other cryptos are usually in correlation.
The uncertainty because of the Russian-Ukrainian war, high inflation, and the rising risks of the recession remain investors’ focus. Because of this, we will probably see new lows for many cryptocurrencies in the weeks ahead.
Wells Fargo warned its clients to keep trade sizing small given uncertainties around the situation because mistakes are easily made in a situation like this.
Bitcoin is trading below the $30000 level this Sunday, indicating that the price could soon test the $28000 support level. If the price breaks this support level, it would add pressure to the whole cryptocurrency market.
On the other side, if the price of Bitcoin breaks the resistance level that stands at $35000, it would add a boost to the whole cryptocurrency market.
Summary
The crypto market has lost approximately $500 billion in market value so far in May, and according to Mike Novogratz, CEO of Galaxy Digital, the cryptocurrencies could decline another 70%. Chris Burniske, a partner at the crypto-focused venture capital firm Placeholder Ventures, said that a bottom in the crypto markets could be expected in the back half of 2022.
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