Why the Crypto Market is Struggling in May 2023: Insights and Analysis

Bombolo | News and Media 

Photo by Behnam Norouzi on Unsplash

The cryptocurrency market has had a bumpy ride in the past year, but 2023 started off positively with many tokens on the road to recovery. However, prices still remain far below their all-time highs from the 2021 bull run.

The Current State of the Crypto Market

The crypto market has experienced a lot of volatility in recent years, with many tokens experiencing significant price swings in a short period. After the fallout of the FTX in 2022, the trust in such currencies was crushed, and the market turned significantly bearish. However, 2023 brought a fresh opening to major digital currencies like Bitcoin and Ethereum, and the crypto market has gradually started turning green.

As of now, the crypto market has a total market capitalization of $1.20 trillion and a daily volume of $70 billion, with Bitcoin and Ethereum leading the pack in terms of volume. Bitcoin has risen 80% this year and Ethereum has shown a rally of 65%.

What Can We Expect in the Coming Months?

Despite the positive signs, the crypto market still has a long way to go before reaching its previous heights. Bitcoin is currently 50% down from its all-time high of $69,000 in November 2021, while Ethereum is trading at $1,900, significantly lower than its all-time high of $4,000.

Although the market has absorbed most of the losses from 2022, there is still a lot of work to be done. However, there have been some remarkable gains in the first four months of 2023, with BTC and ETH surging 17% and 46%, respectively.

The collapse of SVB Financial and other major US banks in March sparked fears over the stability of the conventional banking system, which shifted investor sentiments towards decentralized finance and propelled BTC to its highest level since June 2022.

While the crypto market has responded positively to the collapse of SVB and hopes for a pause in the US interest rate hiking cycle, other financial assets must follow suit for a balanced atmosphere. Overall, while the crypto market is showing signs of recovery, it still has a long way to go before it can reach its previous heights.

In conclusion, the crypto market is still down in May 2023, but there are reasons to be optimistic. Despite the challenges faced by the market, cryptocurrencies have shown remarkable resilience and are gradually turning green.

The cryptocurrency market has experienced significant challenges in recent years, such as crashes, tightened regulations, and the FTX collapse. However, 2023 has brought positive signs and an upward trend for the market.

Experts suggest that seasoned investors can consider investing in stable digital coins like Bitcoin or Ethereum using the systematic investment planning (SIP) format. It is recommended that investors allocate no more than 5% of their overall portfolio to cryptocurrencies.