Bitcoin's May Decline Signals Seasonal Pattern: Historical Model Points to ~10% Short-Term Correction Risk

Odaily Planet Daily News Bitcoin has continued to weaken this month, retreating after facing resistance near the $83,000 level, and is currently heading for a May close in the red. This is seen by the market as the reemergence of the classic "Sell in May and go away" seasonal signal. Historical data shows that after Bitcoin experiences a "Red May," the average return over the following 1 month is approximately -10%, and over 3 months is approximately -3.3%, with a tendency for short-term weakness to persist. If calculated based on historical averages, the price could fall back to the range of approximately $68,200.

However, the medium to long-term performance shows a clear divergence. Data indicates that the average increase over the 6 months following a Red May can be about +139% (influenced by the extreme market conditions of 2013), and even after excluding outlier years, it remains approximately +12.9%, suggesting the long-term trend has not been undermined by seasonal signals.

Analysis points out that a "Red May" within a bear market structure tends to be more destructive, such as in 2018 and 2022. In those instances, the average decline over the following 1 month was 26%, and the cumulative decline over 6 months approached 46%. If BTC breaks below $76,000, it would strengthen the assessment of the risk of entering a bear market structure. Currently, Bitcoin is still trading around the $75,000 mark, still above the key cyclical support level of approximately $60,000, and the overall market remains in a phase of contention between bulls and bears. (Cointelegraph)