Sell in May? A Breathless Crypto Sideways Market Tormenting Indecisive Retail Investors

Crypto market shackled by macroeconomic variables… Bitcoin slightly strong, altcoins slightly weak 'watching and waiting'

▲ US, Iran, Bitcoin (BTC), Ethereum (ETH), XRP, cryptocurrency rebound/ChatGPT generated image ©

The virtual asset market has entered a strong wait-and-see mode, unable to find a clear direction. While the leading cryptocurrency Bitcoin (BTC) continues a tough tug-of-war around the $78,000 mark, major altcoins remain in a slightly weak position, creating a range-bound market overall.

Bitcoin 'Holding Its Own' Alone… Frozen Altcoins

As of 9:23 AM KST on the 3rd, data from the cryptocurrency market aggregator CoinMarketCap shows that the global virtual asset market capitalization has increased by 0.66% compared to the previous day, reaching $2.61 trillion. The 'Fear & Greed Index,' which indicates market sentiment, stands at 46, pointing to a perfect 'Neutral' state.

Bitcoin is trading at $78,579.85, up slightly by 0.48% from the previous day and 1.39% from a week ago. In contrast, Ethereum (ETH) recorded $2,312.49, an increase of 0.80% from 24 hours prior, but a decrease of 0.14% on a weekly basis. Most major altcoins, including Ripple (XRP) and Solana (SOL), also showed minimal daily movements of less than 1%, failing to escape the quagmire of negative weekly returns. Exceptionally, Dogecoin (DOGE), the leader of meme coins, showed an independent trend with a weekly increase of 10.30%.

Key Reasons for the Range-Bound Market: Middle East Risk and the Firmly Closed Door to Interest Rate Cuts

Behind this dull sideways market lie complex interwoven global macroeconomic variables.

First, geopolitical tensions between the United States and Iran. Although Iran proposed a new armistice agreement (including nuclear negotiations) through Pakistan, U.S. President Donald Trump emphasized the effectiveness of blockading Iranian waters, maintaining a firm stance that he would "continue attrition warfare until a satisfactory proposal arrives." With economic hardship deepening, including a 15% weekly plunge in the Iranian rial's value and a seven-fold surge in prices, the market is holding its breath to see if Iran's urgency will lead to the resumption of a second round of negotiations.

Second, the receding expectations of interest rate cuts. This week's announced U.S. April non-farm payrolls are estimated to significantly slow to around 50,000, a sharp decrease from the previous month (178,000 cases), with the unemployment rate stabilizing at 4.3%. While robust employment figures could alleviate stagflation concerns, the possibility of early interest rate cuts is virtually off the table due to the lack of an easing bias confirmed at the recent Federal Open Market Committee (FOMC) meeting. According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the probability of the benchmark interest rate remaining frozen by year-end is 77.7%, meaning the key upward catalyst of liquidity supply has disappeared.

Future Outlook: 'Sell in May' vs. 'Trump Year-End Rally'

While the stock market adage 'Sell in May and go away' is re-emerging, outlooks are divided. The S&P 500 index has shown statistical strength, averaging a 1.5% rise in May over the past decade, and this, combined with the Trump administration's unique tendency for a 'year-end rally after confirming a bottom in March-April,' means expectations for a rebound are still alive.

For the time being, the cryptocurrency market is expected to strongly synchronize with the trends of the New York stock market rather than relying on its own positive news. In particular, the earnings announcements of key artificial intelligence (AI) and semiconductor-related stocks, such as Palantir and AMD, scheduled for this week, will influence Nasdaq's investor sentiment and, furthermore, serve as a crucial weathervane determining Bitcoin's breakout above its range ceiling.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*