Bitcoin Experienced First Monthly Drop Amid US Economic FUD

The crypto comeback is fading, putting Bitcoin on track for its worst month since the FTX exchange went bankrupt in November 2022. The 6% drop in May is Bitcoin's first monthly decline in 2023. A measure of the top 100 digital assets has fallen by a similar amount.

The largest crypto coin increased by 84% from the beginning of the year to mid-April, momentarily reaching US$31,000, but the increase has since slowed to 67%.

BTC recently surpassed $28,000 for the first time in nearly three weeks on Sunday, when US President Joe Biden and House Speaker Kevin McCarthy negotiated an agreement to suspend the debt ceiling until January 1, 2025, preventing the country from defaulting on obligations. 

Meanwhile, traders have changed their expectations for the US Federal Reserve to take a more dovish monetary stance. Let's see how these macro economic factors can affect Bitcoin price and the Ecosystem.

Bitcoin Mining Difficulty Approaches 50 Trillion Milestone

Bitcoin mining difficulty, which quantifies how easy it is to mine a new block, has more than doubled in the previous two years. 

According to BTC.com, mining difficulty is currently at 49.55 trillion and is expected to rise 3.5% to 51.06 trillion on May 31. The increase in difficulty correlates to an increase in hashrate across the network, ensuring that the time it takes to mine a new block remains around 10 minutes. 

The greater level of difficulty means increased competition and, as a result, lesser profits for all miners. Marathon Digital, a major Bitcoin mining operator, stated in a May 2 operating report that increases in mining difficulty could have a significant impact on its Bitcoin production for the year. 

According to the on-chain analytics startup Glassnode, Bitcoin miners have increased their balance sheet by 8,200 BTC since the selloff that followed FTX's implosion.

Bitcoin Price Analysis

Bitcoin (BTC) is currently trading at $27,142.02, with a 24-hour trading volume of $14,566,178,498. This indicates a -2.39% decrease in the last 24 hours and a 1.33% gain in the last seven days. Bitcoin has a market worth of $526,250,231,888 and a circulating supply of 19 million BTC.

The 1-day price chart for Bitcoin price analysis shows that the cryptocurrency has been steadily rising since earlier today, which is encouraging for purchasers. In the previous 24 hours, the price has risen to $27,719 as the bulls have successfully maintained their upper hand. The price has also risen above the moving average (MA), which is currently at $27,117 on the one-day price chart.

The Relative Strength Index (RSI) score has reached near the overbought zone at $53.76, indicating the possibility of a minor price pullback in the medium term; on the other hand, the MACD indicator has been indicating an upward trend for BTC/USD on the one-day chart, with its signal line going above zero and remaining positive. The 20-EMA line has crossed above the 50-EMA line, indicating a bullish trend for the coin.

Source: TradingView

Conclusion

Overall, Bitcoin price research indicates a strong bullish presence in the market, and BTC/USD may be poised to break out higher soon. The short-term trend for BTC appears to be bullish for the time being, but traders should keep an eye out for any potential pullbacks before establishing fresh positions.