May of 2021 became one of the worst periods in the history of bitcoin. In this month, the first cryptocurrency lost almost 36%. This was the third sharpest drop since the creation of the asset. The first slump occurred in September 2011, when bitcoin depreciated by 40%. Then, in 2018, BTC collapsed by 37%.
As it usually happens, the pioneer of the cryptocurrency world was followed by other assets. Thus, in May, ETH declined by 6%, Binance Coin slid by 45%, and XRP sank by 37%. Even Dogecoin inched down by 2%. Candano was the only cryptocurrency in the top-10 list that showed a rise, adding 23%. There were several factors that caused a slump in bitcoin. Last month, Tesla refused to accept bitcoin as payment for its electric cars. What is more, China’s super-aggressive rhetoric concerning mining and cryptocurrencies as well as the US plans to impose a tax on bitcoin transactions and the Fed’s promise to speed up the process of creating a digital dollar exerted downward pressure on BTC. As a result, those who entered the market not so long ago suffered significant losses. Around 1.2 billion of BTC were sold with a loss from 5% to 25%. The crypto market has entered a long consolidation phase. Bitcoin is likely to hover between the levels of $33,000 –$40,000 until the end of summer. Some analysts are sure that by early September, bitcoin will return to $50,000 and by the end of the year, it may even reach $100,000.