Bitcoin Hits Fresh Lows:

Bitcoin (BTC) plummeted to fresh multi-month lows on May 1, with market nerves costing traders half a billion dollars. BTC/USD hit $57,082 on Bitstamp, the lowest level since February, marking second-quarter losses of over 20%.

Market Sentiment Worsens:

The downturn was exacerbated by hawkish fiscal policy moves from U.S. Treasury Secretary Janet Yellen and a legal judgment against crypto exchange Binance and its founder, Changpeng Zhao. Yellen's actions were perceived as pulling liquidity from the market, contrary to expectations, leading to a setback for risk assets across the board.

Key Support Levels Fade:

Before the rapid decline, warnings were issued for Bitcoin and altcoins, with markets treading water since mid-March's all-time highs. Key support levels, including $60,000, no longer offered consolation to bulls, and short-term holder realized prices were also weakening.

Two Possible Scenarios:

Charles Edwards, founder of Capriole Investments, outlined two possible paths for BTC price trajectory. He suggested that as long as BTC trades below $61.5K, scenario (1), which implies distribution, is more likely. A strong reclaim of $61.5K could give hope to bulls for scenario (2), but a flush would also be beneficial for the continuation of the bull market.

Crypto Liquidations:

According to monitoring resource CoinGlass, 24-hour crypto liquidations totaled $470 million, with Bitcoin accounting for $160 million and Ethereum at $120 million. Despite BTC/USD dipping below $60,000, the April monthly close marked the pair’s worst month since the 2022 bear market.