Bitcoin: Is it time to sell in May and go away? BTC analysis

Bitcoin Closes April With $1.9 Billion in Inflows but Ends in the Red

After an impressive streak of capital inflows, the tide is turning for institutional investors. Recent data reveals a massive outflow of $490 million from US Bitcoin ETFs, led by giants BlackRock and Fidelity. This sudden reversal is driven by a tense macroeconomic cocktail: the Fed holding interest rates steady, surging oil prices, and rising bond yields.

Currently, the price of Bitcoin is navigating through a zone of turbulence, trading between $76,200 and $77,100, marking an increase of roughly 1% over the last 24 hours. Investors appear to be stepping away from risk assets, thereby slowing down the bullish rally that had been driving the market. This dynamic raises doubts about BTC’s ability to stay the course in the short term.

Is Bitcoin’s Key Support in Danger?

From a technical analysis standpoint, the current setup calls for extreme caution. Bitcoin has lost its momentum above the psychological $78,000 resistance, a level it is now struggling to reclaim. Indeed, Bitcoin has formed a new 1H bearish order block below $78,000. Furthermore, its 1-hour RSI has reached the overbought territory. A short term pullback toward $74,600 in the coming days is highly likely. Invalidation would require a clean breakout above $77,800.

Currently, Bitcoin is re-entering its triangle pattern below $77,000. For now, Bitcoin is validating a fakeout, and downside price action is favored.

A break below this $74,000 threshold would pave the way for a deeper correction toward the critical liquidation zone of $73,500, or even $72,500.

Should You Sell in May and Go Away?

According to Killa, May will be a red month for Bitcoin. First, he highlights a trend reversal that consistently occurs after the 5th of the month. Bitcoin could therefore begin its descent after May 5.

He also adds that a pump near a monthly close is often a bad sign for BTC. So, is the final capitulation approaching? The AVIV chart for unrealized profit and loss has not yet reached its historical bottom, which sits below the average purchase price of $54,000. Is Bitcoin heading toward $50,000 in the coming months? Clearly, Bitcoin’s direction around May 5 will need to be closely monitored. 

Despite this short term storm, long term fundamentals remain particularly solid. Persistent inflation continues to erode the real yields of traditional assets, which could strengthen Bitcoin’s appeal as a store of value. In fact, many analysts are maintaining an ambitious price target of $80,000 for the coming weeks, provided the macroeconomic environment stabilizes.

It is worth noting that May 15 is a key date for Bitcoin ETFs, as nearly $5 billion in options for the IBIT ETF are set to expire. A dump around this date is probable.

As liquidations pile up and market sentiment shifts toward fear, traders are wondering if this drop presents a golden opportunity. Will Bitcoin manage to absorb this institutional shock and bounce back stronger, or should we expect an even steeper fall before the next recovery? Signals of a local top are becoming increasingly evident in the short term. However, the signals of a long term bottom remain just as valid. Therefore, the upcoming months could also be slow and boring for swing traders.

Sources:

• Checkonchain
• Tradingview
• Killa

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