Bitcoin and altcoin prices continued their recovery, and are on track for their best weekly close since January.
The Bitcoin (BTC) price has jumped for three consecutive weeks and is now 28% above its lowest level this month.
Most altcoins have also jumped, with the best weekly performers being Official Trump (TRUMP), Sui (SUI), Dogwifhat (WIF), Fartcoin (FARTCOIN), and Stacks (STX). All these tokens have jumped by over 50% in the last seven days.
Other risky assets have also bounced back. The S&P 500, Nasdaq 100, and Dow Jones indices have all soared by more than 10% from their monthly lows.
Stocks and crypto prices have jumped as Donald Trump signaled he is ready to reach a trade deal. He also ruled out firing Jerome Powell, the Fed Chair, who has reiterated that interest rates will not be cut until inflation falls towards the 2% target range.
Bitcoin has also emerged as a safe haven as risks rose. While its performance lagged behind that of gold, it still outperformed American stocks.
Is it safe to sell Bitcoin and altcoins in May and go away?
“Sell in May and go away” is a popular phrase in financial markets. It is based on the theory that stocks often underperform in May and during the summer months, as investors travel and stay away from the market.
Seasonality data indicates that Bitcoin’s average return in May is 7.95%, which is lower than the double-digit growth seen in the previous three months. As shown below, the second and third quarters are historically the worst-performing periods for Bitcoin.
Analysts have a mixed outlook for Bitcoin and other altcoins as the recovery continues. In a note, Nansen warned that the ongoing rally could be due to the Fear of Missing Out, which normally happens ahead of a local top.
Ki Young Ju, the founder of CryptoQuant, noted that Bitcoin has not yet broken out. Instead, it is in a wide range and could resume the downtrend unless it jumps above $100,000.
Other analysts are optimistic that Bitcoin could keep rising, citing the expanding M2 money supply and increasing institutional demand. Indeed, spot Bitcoin ETFs have continued to attract inflows, while firms like Cantor Fitzgerald and SoftBank have started investing in Bitcoin.
Bitcoin price technical analysis points to a surge
Technical analysis suggests that it may not be ideal to “sell Bitcoin and altcoins in May and go away.” The weekly chart shows that Bitcoin has formed an ascending channel and recently retested the lower side.
BTC has remained above the key support at $68,845, which marks the upper side of the previous cup and handle pattern. It has also stayed above the 100-day moving average, signaling that bulls are still in control.
Therefore, the coin will likely continue rising and possibly retest its all-time high of $109,285. A move above that level would point to further gains, potentially reaching $125,000.
The main catalyst for this would be progress in trade deals or negotiations with countries like China, South Korea, the European Union, and Japan. These deals could prompt the Federal Reserve to begin cutting interest rates, which would likely boost Bitcoin, altcoins, and stocks higher.