After surging in the first couple of months of the year, BTC has lost momentum in March
After the 500% Bitcoin boom, the data shows why April may mean even more for the value of the crypto asset than the previous months. Cryptocurrencies go their way of becoming, accumulating historical data.
BTC and the historic trend
The price of Bitcoin, up nearly 500% since its last bull run in October, has climbed to a record high of just over $ 60,000 per cue ball this month, but has stopped breaking new ground with the regularity it did during January and early February.
Now that historical Bitcoin price data shows that March losses are often followed by an April rally, Bitcoin traders and investors are optimistic.
“As with any month, the potential prospects for Bitcoin prices can be divided into several different thought processes,” says Danny Scott, chief executive of the Isle of Man-based cryptocurrency exchange and cryptocurrency CoinCorner, speaking via Twitter DM.
“The time of year can be a factor, and the month of April always stands out, as it is the end of the tax year in the UK and the US,” says Scott, adding that given the history, this may well add up to an established feature as an analytical factor.
According to Scott, an analysis of price data over the past ten years shows that Bitcoin rose by an average of 51% in April. If this continues, it will mean that Bitcoin will continue to rise in April 2021 and will be worth just over $ 80,000.
“Since the advent of Bitcoin, there have only been two negative events – in 2014 (-6%), and in 2015 (-4%), which coincide (by chance) with the next month – May, with two negative months-2015 (-1%) and 2018 (-18%). So maybe there’s some momentum and truth to it.”
Scott also notes that these negative April and May events occurred during the Bitcoin bear markets, and that “current industry sentiment”should be taken into account.
The growth of the Bitcoin price index after the collapse caused by the pandemic in March 2020
“At the moment, we are going through a period of growth, and we are gaining steady momentum every week,” says Scott, pointing to big names among billionaires like Elon Musk of Tesla and Jack Dorsey of Twitter, who support Bitcoin, the Wall Street giants deploying Bitcoin services, while countries around the world continue to flood the system with freshly printed money.
However, others are less sure that Bitcoin’s high performance in April of each year is anything more than a coincidence.
“I really don’t have a strong case for why Bitcoin is historically rising in April,” says Bobby Ong, chief operating officer of Bitcoin and cryptocurrency price data site CoinGecko. “Perhaps the only thing I can think of is that historically Bitcoin tends to decline in March, so there is a rise in price in April.”
Ong warns that this “historical coincidence” could mean that Bitcoin traders and investors base their predictions for the future solely on past trends.
“If enough people think that March will be worse and take appropriate steps, then the actual results will also be lower,” says Ong.