Bitcoin temporarily started falling below $45,000 before recovering as it goes into a seasonally bullish April, a month that has seen the asset advance in seven of the last ten years, according to data.
In a Telegram message, Asaf Naim, CEO of bitcoin research startup Kirobo, said, “No one knows for sure what the explanation for the traditional ‘April’s Bull.” “Some believe it’s a psychological process associated with the beginning of spring.”
“After the bullish trend from mid-January to the end of February (which includes the aftermath of Christmas and the Chinese New Year), there is a fall, which then turns into a bull run in early April,” he further said.
After reaching a two-month high of $48,000 on Wednesday, bitcoin dropped to $44,200 on Thursday night. On the other hand, traders bid up bitcoin to a support level of $45,000. Bitcoin might fall to $43,400 if present levels are lost over the weekend.
On Monday, the 5-year and 30-year US Financial yield curves inverted for the first time since 2006, stoking concerns of a recession. According to observers, yield curve inversions — the sale of short-dated treasury bonds in exchange for longer-dated bonds – occur prior to downturns as traders wager on fears about the economy’s health.
Nonetheless, other analysts believe that a typically bullish April might see bitcoin recover and move upward in the following months, paired with favorable growth in broader markets.
In an email to CoinDesk, Alex Kuptsikevich, professional financial analyst at FxPro, said, “It should be emphasized that April is also a great month for stock markets.” “With the dense effect of institutional attitude on the dynamics of bitcoin, the new month starts with positivity and the mood to search for a chance to buy in a downturn.”
Some traders believe bitcoin will reach a short-term target of $53,000 in the next few months. Long-term goals are significantly loftier: In a recent paper, analysts at institutional fund VanEck estimated that if bitcoin becomes the global reserve asset, each bitcoin might be worth up to $4.8 million.
Meanwhile, according to Kirobo’s Naim, bitcoin was likely propped higher in March 2022 by demand from Russian traders.
“We can’t underestimate the link between the price of bitcoin and the currency price,” says the author “Naim expressed his thoughts. “Many Russians turned to bitcoin as a way to protect their investments, and they bought bitcoin (and other tokens) in huge volumes.”
However, there may be some reason to be suspicious in the coming days. “However, now that the currency appears to be recovering, the price of bitcoin has a negative relationship with it,” Naim explained.
Following the rise in U.S. stock futures, Bitcoin fell to $44,300 before recovering to $45,000.
IntoTheBlock’s blockchain data revealed that $200 million worth of bitcoin was placed into centralized exchanges in just seven days. When investors want to sell their coins, they usually move them to exchanges.
On the other hand, institutional activity was optimistic, with an influx of 4,469 BTC into exchange-traded funds last week, pushing total assets to a new lifetime high, as per ByteTree Asset Management.