It’s April and the Bitcoin price has been maintaining a level around $28,000 since March 23rd, following a rally from $23,500 in March. Bitcoin started the year trading at $17,000, leading investors to wonder whether BTC is currently priced high or expecting another surge in the coming months. Two potential factors are suggestive of a near-term price change. Firstly, bitcoins are now heading into a historically strong seasonal period, with an average return of over 17% in six occasions over the past 10 years during April. Moreover, the Bitcoin-stocks price correlation is becoming increasingly tight, indicating seasonable bullishness. However, while the seasonal swell is promising, there is also the emergence of a substantial whale seller, with the US government looking to sell 41,000 seized bitcoins, which could lead to a $1.1B supply increase.
Other factors to consider include the bullish collapse of CeFi in 2022, which caused BTC prices to tank but then bounce back stronger, as the crisis proved the validity of Bitcoin’s fundamental thesis and value proposition. The recent failure of three tradfi banks with crypto exposure was also surprisingly good news for BTC, which saw a rally of 20% in four days, indicating Bitcoin adoption continues to grow, as BTC fundamentals and the community bullishness continues expanding. Institutional investors are bullish about Bitcoin, with reports suggesting that almost half of all institutions surveyed plan to add crypto ETFs to their allocation in 2023. Regulatory grappling over cryptocurrency is a mixed bag but one potential indicator of the regulatory environment’s bullishness is Bakkt’s recent regulatory approval for a $155m crypto deal.