No major developments on the Bitcoin price front this week. The world’s leading cryptocurrency was trading under $40,000 once again, even dropping into the lower portions of $37,000 at one point. It is fighting heavily to cling to $38,000, although key price metrics make it obvious that it will hold the line.
The month-long descending channel continues this week, but many analysts are optimistic going forward. Historically, May has been a great month for Bitcoin. While there are no major links between cryptocurrencies and seasonality, Bitcoin has jumped up big every year in May, and it shouldn’t be any different this year.
May is a Relative Success Month for Bitcoin
Take a look back at the past few years and you’ll see a pattern. May has been a successful month for Bitcoin over the past 11 years. The top cryptocurrency ended the month up 7 times and down only 4. Of course, the volatility makes it very hard to predict what the future holds, but amid all the tension in the world and the negative price trends that have been developing on the crypto market, such positive news is what traders and investors need.
Will May be lucky for Bitcoin this year? Analysts are cautiously optimistic, considering what a rollercoaster ride this year has been for Bitcoin so far. Surprisingly, the crypto market has been mirroring the stock market in recent months. The overall macro environment is not great as it is, and increasing interest rates and sky-high inflation are the reasons why people are hesitant to invest in risky stocks.
Major price moves in May were big in the past, but this year, we shouldn’t expect that kind of development. Such price moves were easier in the past when the world wasn’t thrown in chaos like it is now. Two years of the pandemic proved hard enough for the financial system, and the ongoing Russia-Ukraine war has made things even worse.
Still, it would be great to see at least a tiny price jump in May which should be a light in these dark crypto times.
Small Median Moves Likely
Analysts expect a median price move of just over 3% this May, which is still a solid move ahead. The risk-off environment in the past few months has impacted Bitcoin. That’s why prices have been dropping so far, but it could all change later this month. As mentioned earlier, Bitcoin has been moving with the stock market so far, and just like it, it has reacted negatively to financial plans from the Fed and other countries.
Aggressive hikes are to be expected, but those could be short-lived. Bitcoin’s correlation to the S&P 500 is at an all-time high this year, which isn’t a surprise considering the market conditions. In times such as these, financial assets trade in close correlation, and that’s why crypto prices haven’t been impressive.
In general, seasonal projections are not strong enough, but May gives Bitcoin traders hope. Let’s wait and see what happens.