Bitcoin is bringing the buzz back to the crypto space! Analysts and investors are already going back and forth on whether May will mark the beginning of a new bull run. DeliciousNFT.com helps to dispel the hype. Most notably, it presents a thoughtful, even-handed view by breaking down what would spark a boom while acknowledging the risks and contrary arguments.

Halving Hopes and Historical Hints

The Bitcoin halving halves the reward miners receive for adding new blocks to the blockchain. This very noteworthy event is the biggest driver of the current bullish market sentiment. Historically, these episodes have been associated with large upward price movements, illustrating the fundamental economic law of supply and demand. Taking a look at the last three halvings reveals an obvious pattern. Significant price appreciation typically begins six to twelve months following each event. The latest halving was on April 19, 2024. Either way, the event has certainly laid the groundwork for a possible bull run in the month ahead.

According to historical data, all-time highs usually happen between halvings – around 1 to 1.5 years after the halving. Indeed, this pattern indicates a likely peak in the neighborhood of May 2025. Technical indicators are great diagnostic tools. For example, the golden cross, when the 50-day moving average crosses above the 200-day moving average, is considered a bullish indicator. If this happens in May, it can go a long way to reinforce that trend is up.

It's crucial to consider that many analysts believe the halving's impact is already priced into the market. This new perspective on fare increases implies that the true impact on price may be quite a bit less dramatic than what we see in historical trends. Substantially lower trading volumes are the rule in months like August, September, and December. This dropoff in market activity typically foreshadows a period of sideways price action. Should May continue with low volumes, it will dash hopes of a super speedy return full bull run.

ETF Euphoria and Institutional Influence

The recent record inflows into US-based Bitcoin exchange-traded funds (ETFs) are another aspect feeding into the bullish narrative. On April 21, these ETFs had their biggest single day of net inflows since late January with $381.3 million. This influx of capital, largely driven by the ARK 21Shares Bitcoin ETF (ARKB), reflects growing institutional interest and confidence in Bitcoin as an asset class.

These inflows are a sign of the times and point to a larger change in investor behavior as confidence in established financial systems continues to fade. ETF bulls were out in full force as Bitcoin prices shot up above $88,500—hitting a four-week high in the process. Its market capitalization exceeded the $1.75 trillion mark for the first time since late March. This inverse correlation implies that as institutional investment increases into Bitcoin, the impact on Bitcoin’s price can be pronounced.

…And that positive momentum continued through the break! Remember that ETF inflows are inherently volatile and subject to the whims of various influences like macroeconomic developments and regulatory shifts. After all, a sudden change in investor sentiment could spur massive outflows, overshadowing and possibly preventing any bullish bull run!

Geopolitical Game and Market Manipulation

The fungible asset’s price trajectory is now globally influenced. Regulatory actions in the US, China and other major economies can create sharp swings in market sentiment and investor appetite. The US has taken a bold step in the right direction with the recent approval of multiple Bitcoin ETFs. Missions could run into trouble with regulatory uncertainty from other areas.

Key price levels to watch include:

  • $86,000: A resistance level that needs to be flipped into support to target higher highs at $90,000.
  • $87,740: The 200-day exponential moving average, a trendline that was lost on March 9 for the first time since August 2024.
  • $90,000: A higher highs target if the $86,000 resistance is flipped into support.
  • $91,240: A major supply zone where the 100-day SMA sits.
  • $65,000: The true market mean, the average cost basis for active investors.

These levels can act as triggers for both short squeezes (where short sellers are forced to cover their positions, driving the price up) and long liquidation cascades (where leveraged long positions are automatically closed, leading to a price drop).

The combination of the factors listed above continues to suggest that Bitcoin is on the cusp of a new bull run starting in May. Investors must still do due diligence and tread lightly into this new opportunity. We all know the crypto market is volatile, and that you can’t look to the past to predict what’s coming next.