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 encountering resistance near the $83,000 level. It is currently heading towards a negative monthly close in May, which the market views as the classic "Sell in May and go away" seasonal signal reappearing. 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%, indicating short-term weakness usually persists. According to historical averages, the price could potentially fall back to the $68,200 range.

However, the medium-to-long-term performance shows a significant divergence. Data indicates that after a Red May, the average gain over the following 6 months can reach approximately +139% (influenced by extreme market conditions in 2013). Excluding the outlier year, the average gain is still approximately +12.9%, suggesting the long-term trend has not been disrupted by this seasonal signal.

Analysts point out that "Red May" within a bear market structure tends to be more destructive. For example, during 2018 and 2022, the average decline in the following month was 26%, and the cumulative decline over 6 months was close to 46%. If BTC falls below $76,000, it would reinforce the risk assessment of entering a bear market structure. Currently, Bitcoin is still trading near $75,000, remaining above the key cyclical support level of around $60,000. The overall market remains in a phase of divergence between bulls and bears. (Cointelegraph)