Bitcoin’s First Monthly Loss of 2023: Is the Crypto Market Crashing?

In the Brief:

  • Bitcoin on track for first monthly loss of the year
  • Ether also poised for monthly decline
  • Crypto market volatility linked to regulatory concerns and environmental impact
  • China's crackdown on mining and trading may have contributed to recent market downturn
  • Investors remain optimistic about long-term prospects for cryptocurrencies

3 - 6 minute read

The European Central Bank (ECB) has recently announced that they have finalized prototypes for a digital euro, according to reports released on Friday. The ECB is preparing to decide later in the year whether to develop the EU’s fiat currency in a new format. ECB Executive Board member Fabio Panetta said in a letter to the European Parliament that “this exercise shows that it is possible to smoothly integrate the digital euro design choices into the existing payment landscape while leaving ample scope for innovative features and technologies.” The ECB sees potential for the digital euro to boost innovation, but the bank appears more skeptical about using Web3-style distributed ledger technology and smart contracts.

In other news, criminal charges against Sam Bankman-Fried, including technicalities around his extradition back to the US and campaign finance violations, are valid, according to prosecutors in court filings from Monday. Bankman-Fried was the former head of failed crypto exchange FTX. US lawyers were responding to early May pretrial motions from Bankman-Fried’s attorneys to dismiss most charges levied against him. Lawyers for Bankman-Fried cited procedural issues, the irrelevance of some US laws given FTX’s non-US location, and allegations that exceeded the agreed extradition terms. However, they did not seek to dismiss securities fraud and money laundering charges. With regards to Bankman-Fried’s argument that the Bahamas needed to approve any charges prior to extradition, prosecutors contended that the US treaty with the Caribbean nation allows for post-extradition charges with the consent of the extraditing country, and any charges presented post-extradition in new indictments do not violate this rule.

As for the crypto market, Bitcoin (BTC) recently climbed above $28,000 after an agreement on a deal to raise the US debt ceiling. However, it still appears on track for its first monthly loss since December, with prices down about 5% for May. Ether (ETH), on the other hand, is up modestly in May after trading in a tight range for most of the month. Analyst Matteo Bottacini at Crypto Finance AG said that he sees potential for ether and other altcoins to outperform thanks to positive narratives surrounding the Ethereum network, such as the all-time high in staked ether.

The chart of the day shows that 1.4 million addresses have accumulated over 700,000 bitcoin in the price range of $27,167 and $27,976. The range is likely to act as a solid support, according to onchain analyst Ali Martinez.

Traders should keep an eye on the developments of the digital euro, as it could potentially have a significant impact on the cryptocurrency market. The ECB’s skepticism towards using distributed ledger technology and smart contracts may limit the potential impact of the digital euro on the market, but it is still important to monitor any developments. As for Bitcoin and Ether, traders should pay attention to the current market trends and keep an eye out for any potential opportunities or risks. The recent agreement on a deal to raise the US debt ceiling could potentially have an impact on the market, so traders should stay informed and be prepared to act accordingly.

The bottom line is that the ECB has finalized prototypes for a digital euro, which could potentially boost innovation but may not utilize distributed ledger technology and smart contracts. Criminal charges against Sam Bankman-Fried are valid, and Bitcoin still appears on track for its first monthly loss since December. Traders should monitor developments regarding the digital euro and stay informed about current market trends to prepare for any potential opportunities or risks.

Disclaimer: The content in this article is provided for informational purposes only and should not be considered as financial or trading advice. We are not financial advisors, and trading carries high risk. Always consult a professional financial advisor before making any investment decisions.

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