Bitcoin just hours away from closing its first red month since August. How will it continue afterward?

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Bitcoin (BTC), trading near $60,000 (USD), is close to closing April with a price drop of around 15%. Thus, April is positioned as the first bearish month for bitcoin after closing seven consecutive months on the rise, its largest bullish period in 12 years. However, it should be noted that the fall in April does not undo all the rise that he has had in those months. At the moment, it is trading only 18% below the historical maximum price it reached in March, which was USD 73,700. Currently, despite the price decline, bitcoin is registering an appreciation of almost 300% from the bottom of the market it registered a year and a half ago. This can be seen below.

Bitcoin price per month from the bottom of the market. Source: TradingView. The fall of April, for now, It appears as a normal pullback within a bull market to consolidate the rise. This also takes place in the middle of a key context. In April, the fourth bitcoin halving in history occurred, an event that has historically led to temporary profit-taking as “selling the news.” In addition, it occurs in the midst of a rebound in inflation in the United States and an escalation of the conflict in the Middle East. This context has discouraged demand for risk assets, including major stocks that, like bitcoin, recorded their all-time high price a month ago. With this context, next month appears to be a challenging period for the price. A saying that has historically been heard in risk asset markets is “sell in May and leave.” The reason for this saying is that financial markets usually fall until September, when the fiscal year resumes in the northern hemisphere, motivating investments.

In the last three years, bitcoin closed May with a depreciation, echoing such a saying, although it has not always been like this. In five of the last eleven years he ended that month up and six down, so he does not show a defined direction in said period. This can be seen in the following Coinglass graph.

Bitcoin price performance by month in recent years. Source: Coinglass.

Bitcoin not yet exhibited at the end of the bullish peak

The Spanish trader known as SantinoCripto stood out that “the best part of the bull market in bitcoin” is still missing. As seen below, this is the phase of explosive price rise that has always been experienced after the halving, an event that reduces the issuance of the currency by half, promoting the rise.

The blue lines show the latest halving dates. Source: SantinoCripto. As reported by BitcoinDynamic, bitcoin has recorded returns ranging from 500% to 5,300% for around a year after each halving. According to this, SantinoCripto considers that currently the coin is in the middle of the bull market, although it does not rule out that in the short term it will fall further to USD 58,000. The trader also emphasizes that, as long as the market returns to the upside, “altcoins should fly and offer even better performance than bitcoin.” Entities such as Glassnode, an on-chain analysis company, have distinguished that the impact of halving on the market is becoming less. That is because, although it limits the selling pressure of miners, almost the entire supply of BTC has already been mined and adoption has grown significantly, so it does not imply a big change in supply. Galaxy Digital, a bitcoin mining and asset management company, has highlighted that, in addition to being bullish, there are bearish and neutral views for the market given the minor effect of the halving and its possible discount. Precisely, the price reached a new all-time high before such an event, something that had never happened before. In any case, according to Galaxy Digital, the pre-halving rise occurs in the face of “a monumental change aimed at altering conventional notions about bitcoin price cycles.” This is the arrival of exchange-traded funds (ETFs) for the currency in the United States, products that can continue to drive demand for the currency. From the asset management company Invesco, global market strategist Kristina Hooper indicated that a trend of lower inflation in the United States will motivate risk asset markets. He concludes, like other specialists in the ecosystem, that investors are approaching May with caution while waiting for more positive economic data.