As April comes to a close, bitcoin is displaying a defensive stance, trading at $78,317.47. However, historical seasonal patterns suggest that any downturns may be short-lived, potentially paving the way for an upward trend in the coming weeks.
Since 2013, May has tended to be a favorable month for the cryptocurrency, with seven out of the past 13 years seeing gains. The average return of around 8% is relatively modest compared to stronger months like October and November, yet it still indicates a positive leaning. Following April's 10% increase, the seasonal pattern implies that the broader uptrend could remain intact, supported by similar bullish seasonality in the S&P 500. The outlook is further reinforced by consecutive net monthly inflows into U.S.-listed spot exchange-traded funds, which have attracted over $1.8 billion this month, following March's $1.32 billion.
Nevertheless, traders must remain vigilant, as rising bond yields pose a challenge to risk assets. Analysts warn that the market is digesting the 'higher-for-longer' signal, and without a liquidity catalyst, bitcoin may remain range-bound rather than poised for a breakout. Additionally, the risk of a global economic downturn, potentially triggered by the Iran war and energy market disruption, could impact the market in May. A bullish crossover is impending, where the 50-day average price is set to move above the 100-day average, which may signal further upside if sustained.
However, this indicator has a mixed record, particularly during bear markets.