Bitcoin’s June performance based on historical data

Bitcoin has decreased by a little over 7% in May, making it the first negative month for the world’s largest cryptocurrency since last December. This decrease is also the worst month for BTC since last November when the collapse of cryptocurrency exchange FTX triggered a 16% price drop. However, the 7% decrease in May is an improvement compared to its performances in May 2021 and 2022, when Bitcoin lost 35.38% and 15.56%, respectively.

As of Wednesday, Bitcoin was trading down around 2.0%, influenced by a combination of macro headwinds with the US dollar rising on stronger-than-expected US job openings data, hawkish Fed speak, and technical selling.

Recent chart analysis suggests that Bitcoin is in a medium-term downtrend. It recently rejected a test of its 50-Day Moving Average and confirmed a downtrend from the April/early May highs, with technicians subsequently calling for a retest of recent sub-$26,000 lows.

How Will Bitcoin Perform in June?

On average, June is Bitcoin’s worst month for price appreciation throughout the year. Since 2011, Bitcoin has only appreciated at a rate of around 7% in June, with only September and August seeing a weaker average appreciation. In the last three years, Bitcoin has experienced an average price drop in June of 15.6%. However, chart analysis suggests that price risks remain tilted to the downside in the upcoming month.

The recent macro environment has shifted, with US jobs, service sector (PMI), and inflation data remaining stronger/hotter than expected, pushing back against the idea that the Fed is done with rate hikes. Strong data and commentary from Fed policymakers has forced markets to price out bets on rate cuts in the second half of 2023 as US recession bets are squared. All of this has given the US dollar decent support and lifted US yields above recent multi-month ranges. Whilst AI optimism and a paring of US recession bets has kept the rally in US stocks (particularly in big tech names), which would normally help Bitcoin, the stronger dollar and higher yields have been the stronger influence.

If upcoming June jobs, inflation, and activity data continue to paint a picture of a US economy that remains resilient and still faces unacceptably high inflationary pressures, another Fed hike is likely in June, and the Bitcoin price could well fall further.

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