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Crypto prices displayed plenty of their notorious volatility last month.
With more downs than ups, the combined global crypto market fell 28% in May.
Bitcoin (CRYPTO: BTC) declined 17% in May. At the current price, the world’s first crypto is down 56% from its 10 November record highs.
Ethereum (CRYPTO: ETH) lost even more ground, down 27% over the month, while meme token Dogecoin (CRYPTO: DOGE) dropped 37% in May.
Of course, that’s all-virtual water under the bridge now.
So, what might crypto investors expect in the month ahead?
For some insight into that answer, we reached out to two industry pros.
Crypto prices and US equity markets
Noting that crypto prices have fallen amid rising interest rates, especially from the influential US Federal Reserve, Simon Peters, market analyst at eToro, told The Motley Fool, “I think markets have priced in interest rate increases over this year now.”
Looking ahead to crypto prices in June and the rest of 2022, Peters said investor “focus is shifting to earnings and the possibility of a recession”.
According to Peters:
If these risks increase, we could see equity markets fall further. Given the high correlation between US equity markets and crypto, crypto prices could fall further also. Historically, crypto bear markets have seen declines from the all-time high of 80% or more. The fact that we are only down 56% from the all-time high on Bitcoin could suggest there is room for a further fall.
But there is a bullish case for crypto prices as well.
“With the recent sell-off in Bitcoin, we are now testing some interesting technical indicators,” Peters said.
He pointed out that the 200 weekly exponential moving average is historically where Bitcoin bear markets have tended to bottom out. “Also, with on-chain metrics, Bitcoin prices are trading down towards the Realized Price, which again is historically a significant support level,” he added.
And there’s the potential, Peters said, that if recession risks increase we could “see a decoupling from US equities, as investors look for Bitcoin and other cryptos as digital safe-havens”.
Positive adoption signals
Jonathon Miller, Kraken Managing Director for Australia, told us that there still looks to be plenty of appetite for cryptos on both the institutional and private levels, which could help support crypto prices in the month and year ahead.
According to Miller:
Recent macro events mean financial markets are undergoing a period of acute volatility. Despite this, we are still seeing positive adoption signals from institutions and individuals for crypto.
We’ve had the launch of crypto ETFs in Australia, global brands like Spotify and eBay enter the NFT space even as the market cools down, and the likes of Emirates set to accept crypto payments from customers.
And there are still plenty of advancements taking place in the crypto world.
“While price movements matter, it’s important to focus on the innovation happening in the space during these times and it’s quite clear there is still plenty happening and lots more to come,” Miller said.