Bitcoin falls below $27,000 and cryptocurrencies are aiming to close the month with falls of up to 20%

Bitcoin falls below $27,000 and cryptocurrencies are aiming to close the month with falls of up to 20%

Bitcoin it falls below $27,000 in the last 24 hours and the cryptocurrencies are aiming to close a difficult month with drops of up to 20%. Despite slight signs of recovery, the leader of digital currencies continues without showing a sustained upward trend since Marchwhen it showed its resistance with gains of 15% after the fall of Silicon Valley Bank.

However, this Wednesday, May 31, the day is marked by the expectation regarding the US debt ceiling in the midst of discussions in the Lower House. “Bitcoin is holding steady as investors wait to see how the cryptoverse will react to tightening conditions once the debt deal is approved and the Treasury issues a trillion-dollar Treasury bills,” Edward Moya explained. , OANDA Senior Market Analyst.

According to this expert, “Typically, when governments issue debt that pushes their debt to GDP ratio to uncomfortable levels, that should be good news for cryptocurrencies.” However, he says that “too many companies could face difficult financing options in the coming year.”

In this context, which were the best and worst performers in May?

Among those that left the best gains is Tron (TRX) with a rise of more than 10% followed by Ripple with a rise of 5% in the last 30 days. Ethereum, only achieves an advance of more than 1%.

On the loss side, there are:

  • Avalanche (AVAX): -20%
  • Shiba Inu (SHIB): -18.7%
  • Sunny (SUN): -13%
  • Polygon (MATIC): -12%
  • Dogecoin (DOGE): -12%
  • Polkadot (DOT) : -12%
  • Bitcoin (BTC): -9%
  • Cardano (ADA): -9%
  • BNB (BNB): -7%

What are the causes of these results?

This month the Fed’s decision to raise interest rates became key in cryptocurrencies. The change in monetary policy in recent weeks foresees that rates will finally be raised again by 0.25%.

According to CME’s FedWatch tool, there is a 63% chance the Fed will hike 25 basis points in the conclave of June 14.


On the other, the market continues to suffer from a lack of liquidity. Dessislava Ianeva, a research analyst at crypto data firm Kaiko, points out that thebitcoin “has moved in step” with market liquidity and that quantitative tightening (QT, for its acronym in English) that the Fed has carried out “was partially offset by Treasury spending its cash in the Fed and the Bank Term Financing Program, but that momentum has now been exhausted.”

According to this expert, new rate hikes combined with the QT “it would definitely dampen the prospects for a meaningful rally across the market”. “That being said, other different narratives have been increasingly driving BTC markets this year, such as store of value, NFTs, as well as technical factors such as supply and demand or liquidity,” he notes. Also, Ianeva believes that, unlike last year, bitcoin could show resilience amid further monetary tightening.

Source: Ambito

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