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Crypto prices have shown much of their notorious volatility over the past month.
With more declines than ups, the combined global crypto market fell 28% in May.
Bitcoin (CRYPTO: BTC) is down 17% in May. At current prices, the world’s first crypto is 56% off its record highs of Nov. 10.
ether (CRYPTO:ETH) lost even more ground, losing 27% over the month, while Meme Token Dogecoins (CRYPTO:DOGE) fell 37% in May.
Of course, that’s all virtual water under the bridge now.
So what can crypto investors expect in the coming month?
To gain insight into that answer, we reached out to two industry professionals.
Crypto prices and US stock markets
Simon Peters, market analyst at eToro, noting that crypto prices have fallen amid rising interest rates, particularly from the influential US Federal Reserve, told The Motley Fool: “I think markets are now pricing in rate hikes this year.”
Looking ahead to crypto prices in June and the rest of 2022, Peters said investors’ focus is “shifting to earnings and the possibility of a recession.”
According to Peters:
If these risks increase, stock markets could fall further. Given the high correlation between US stock markets and crypto, crypto prices could also continue to fall. Historically, crypto bear markets have seen declines from all-time highs of 80% or more. The fact that we are only 56% below Bitcoin’s all-time high could indicate that there is room for another decline.
But there is also a bullish case for crypto prices.
“With the recent Bitcoin sell-off, we are now testing some interesting technical indicators,” said Peters.
He pointed out that historically, the 200 weekly exponential moving average is where bitcoin bear markets have tended to bottom. “Even with on-chain metrics, bitcoin prices are trading towards the realized price, which again historically is a significant support level,” he added.
And there’s potential, Peters said, that as recession risks rise, “we could see a decoupling from U.S. stocks as investors look to bitcoin and other cryptos as digital safe havens.”
Positive acceptance signals
Jonathon Miller, Kraken Managing Director for Australia, told us that there still seems to be a lot of appetite for crypto at both institutional and private levels, which could help support crypto prices in the month and year ahead.
According to Mueller:
Recent macroeconomic events mean that financial markets are going through a period of acute volatility. Despite this, we are still seeing positive adoption signals from institutions and individuals for crypto.
We’ve had crypto ETF launches in Australia, global brands like Spotify and eBay are entering the NFT space even as the market cools, and companies like Emirates will be accepting crypto payments from customers.
And there are still many advances in the crypto world.
“While price action is important, it’s important to stay focused during these times on the innovation that’s happening in this space, and it’s pretty clear there’s a lot more happening and a lot more to come,” Miller said.
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