Bitcoin is on track for the second-biggest monthly percentage decline on record, despite bouncing from session lows in Asia.

The cryptocurrency changed hands near $36,200 at 9:00 am UTC, representing a 37.5% loss for May. Prices hit a low of $34,195 early today. 

The monthly decline beats the 37% drop seen in November 2018 and is just short of the record 40% slide in September 2011, according to Bitstamp data. 

Related: Crypto Long & Short: What I’ve Learned in the Past Five Years

Ether, the second-largest cryptocurrency, is on track to end May down 12%, the first monthly loss since September 2020. Meanwhile, gold has gained 7%, its biggest monthly rally since July 2020, and the S&P 500 is little changed on the month, per data provided by TradingView.

The bitcoin market looked weak earlier this month amid continued selling by whales, or large investors with an ability to make or break price trends. The cryptocurrency took a beating after Tesla disowned bitcoin as means of payment, citing environmental concerns. The move dashed hopes for widespread corporate adoption raised by the carmaker’s decision to adopt bitcoin in February. 

The market mood soured further after China’s recent regulatory announcements and on concern of an early scaling back of stimulus by the U.S. Federal Reserve. 

Bitcoin slumped from $58,000 to almost $30,000 in the eight days to May 19 and has traded sideways ever since, with the upside capped by the 200-day simple moving average (SMA) at just above $40,000.

Related: Globant Says It Bought Bitcoin in Q1

According to blockchain analytics firm Glassnode, the price crash was driven mainly by panic selling by new investors who bought coins during the first-quarter bull run. Meanwhile, holders and institutions have been buying the dip in a sign of confidence in cryptocurrency’s long-term price prospects. 

The supply held by whale entities – clusters of addresses controlled by a single network participant holding at least 1,000 coins – has increased by over 25,000 BTC to 4.149 million since May 19. 

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Looking forward, a sustained accumulation by large investors might be needed to restore battered market confidence. The number of whale entities rose in tandem with the price between October and February.

Chart analysts foresee a relief rally in the short term, as the sell-off looks overdone. 

“Bitcoin is newly oversold from an intermediate-term perspective, and there is a new short-term ‘buy’ signal from the DeMARK Indicators today that supports a two-week rebound,” Katie Stockton, founder and managing partner of Fairlead Strategies, said in a weekly research note published on Monday.

DeMark indicators compare the most recent maximum and minimum prices to the previous period’s equivalent price to measure the demand of the underlying asset. 

Stockton, however, said the bounce is likely to be short-lived because intermediate-term momentum is to the downside, as indicated by the negative reading on the weekly MACD histogram. 

The overall bias remains bullish, with the likes of Ray Dalio, founder of Bridgewater Associates, preferring to hold bitcoin over bonds in an inflationary environment. 

Also read: Biden’s 2022 Budget Includes New Crypto Reporting Proposals

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