BTC’s price ended up imploding and tumbled, marking its worst trading day since 2020.
This widespread weakness comes after traders digested the recent half-point interest rate hike by the Federal Reserve.
The Luna Foundation Guard purchased $1.5 billion worth of Bitcoin, which could lead to an increase in its value.
Bitcoin (BTC) is the largest cryptocurrency token in terms of market capitalization, and its various price movements are shaping the overall flow of the entire crypto space as a result.
The global financial markets plunged on May 5, as the Dow Jones managed to see a 1,063 point drop, and Bitcoin (BTC) saw a decrease in value to $35,571, which marked one of its lowest points of the month thus far.
This downturn is a result of the half-point interest rate hike by the Federal Reserve, the highest hike since 2000.
Bitcoin’s path to recovery
On May 5, 2022, the Luna Foundation Guard purchased $1.5 billion worth of Bitcoin (BTC). These funds were raised through a $1 billion over-the-counter (OTC) swap with the cryptocurrency broker Genesis.
The other $500 million worth of BTC was purchased from the hedge fund manager known as Three Arrow Capital. In April, $100 million worth of BTC was purchased as well.
Alongside this, Gucci announced that they would accept cryptocurrencies in the US.
Specifically, the Italian luxury brand will start accepting payments in cryptocurrencies in some stores in America, one of which is the Bitcoin (BTC) cryptocurrency, which will likely increase the usage and appeal of the token.
Bitcoin miners also reached the halfway point to the next block reward halving.
Specifically, on May 5, 2022, at block height 735.000, the Bitcoin mining pool Poolin ended up mining the 105,000th block reward since its last halving.
This block represents the halfway point to the next halving, which is estimated to occur in 2024.
Should you buy Bitcoin (BTC)?
On May 6, 2022, Bitcoin (BTC) had a value of $36,390.24.
In order for us to see what this value point indicates for the future of BTC, we will be going over its ATH, as well as its performance throughout the previous month.
The all-time high value of the Bitcoin (BTC) cryptocurrency was on November 10, 2021, when the token reached a value of $69,044.77.
Here, we can see that at its ATH, Bitcoin (BTC) was $32,654.53 higher in value, or by 89%.
When we look at the token’s performance in April, Bitcoin (BTC) had its highest point of value on April 2, when the token was worth $47,003.43. Its lowest point was on April 26, 2022, when the token decreased in value to $38,084.54.
Here, we can see a decrease in value of $8,918.89 or by 19%. With this in mind, at $36,390.24, it is clear that BTC has increased from its dip to $35,571.
If it breaks through the $37,000 price barrier, we can see an upwards trend, where BTC can reach $40,000 by the end of May.
This would make BTC a solid purchase; however, if it dips again to $35,000 or under, it might be worth considering.