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

Odaily Odaily reports that Bitcoin has been weakening this month, retreating after facing resistance near the $83,000 level and is currently heading towards a monthly decline in May. This is seen by the market as the classic "Sell in May and go away" seasonal signal re-emerging. Historical data shows that following a "Red May" (monthly decline), Bitcoin's average return over the next 1 month is approximately -10%, and the average return over 3 months is approximately -3.3%, indicating a tendency for continued weakness in the short term. Based on historical averages, the price could potentially fall back to the $68,200 range.

However, medium to long-term performance reveals a clear divergence. Data indicates that the average price increase in the 6 months following a "Red May" can reach approximately +139% (influenced by the extreme market conditions of 2013). Even excluding the outlier year, the gain is approximately +12.9%, suggesting that the long-term trend has not been broken by the seasonal signal.

Analysts point out that a "Red May" within a bear market structure tends to be more destructive. For instance, in 2018 and 2022, the average decline in the following month was 26%, and the cumulative drawdown over 6 months approached nearly 46%. If BTC drops below $76,000, it would strengthen the risk assessment of entering a bearish market structure. Currently, Bitcoin is still trading around $75,000, remaining above a key cyclical support level of approximately $60,000, indicating the market as a whole is still in a phase of divergence between bulls and bears. (Cointelegraph)