Bitcoin price is up 1.3% in May, a month where returns historically have averaged 27%. But at least one analyst suggests the price could still drop as low as $32,000. At the time of writing, BTC is changing hands at $38,588.
BTC/USD 4-hour chart | Source: TradingView
Bitcoin price lethargic as May starts, though month could prove pivotal
Bitcoin price has started May with the same listless price action that prevailed for most of April, although analysts say the coming month could prove decisive. BTC is up 1.3% through the first two days of May, changing hands around $38,588 as of press time. Historical data shows that May is typically a strong month for Bitcoin, with gains averaging 27% over the past 11 years.
“Exchange funding rates for Bitcoin have shown a bias toward longing once again after the trading week originally opened with significant profit-taking. We ideally look for a certain level of crowd FUD for optimal price rise conditions”, Santiment reported.
Source: Santiment
Since late March, Bitcoin has been in a short-term downtrend, confirmed by a series of lower price highs. That indicates persistent selling pressure, although support at $37,500 could sustain the current price range. Further, BTC has been anchored around $40,000, the midpoint of a three-month price range, suggesting indecision among buyers and sellers.
Typically, BTC consolidates within a three-month price range following an extreme move, such as the 50% sell-off after the April and November prices peaked around $64,000 and $69,000 last year. That means a decisive breakout or breakdown could occur sometime this month. On the weekly chart, Bitcoin has experienced a loss of upside momentum, suggesting limited upside beyond the $46,000-$50,000 resistance zone. A bearish setup on the monthly chart increases the risk of a price breakdown.
BTC is on the watch for a countertrend bullish signal on the weekly chart, per the DeMARK indicators. If confirmed, BTC could experience a brief price bounce, consistent with solid seasonal trends in May.
Ether (ETH) was up 0.41% in the past 24 hours, trading at $2,803. Other significant cryptos were mainly in the red as risk-averse investors veered away from lesser digital assets such as CRO, off nearly 11% at one point, and Shiba Inu (SHIB), down more than 4%.
Still, some altcoins have edged higher, including Avalanche (AVAX), up by 4% over the past 24 hours but down by 17% over the past week. Overall, stocks and cryptos have experienced choppy price action over the past few months.
The overall cryptocurrency market cap stands at $1.740 trillion, and Bitcoin’s dominance rate is 42.1%.
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