Bitcoin (BTC) shows potential for a bullish trend in May, with analysts citing factors like miner economics and strong accumulation by long-term holders. Recent data indicates miners are facing losses, possibly leading to tighter supply. Additionally, global fiat liquidity is on the rise, providing new capital for investment. BTC has gained 14.6% from early April lows, now trading around $97,048.
Bitcoin (BTC) might be on the brink of a bullish trend this May. Several key indicators have caught the attention of analysts, revealing promising signs for the largest cryptocurrency. Factors like miner economics, fluctuating network hashrate, long-term holder accumulation, and an increase in global fiat liquidity suggest that Bitcoin’s price could soon rise. Impressively, BTC has recovered by 14.6% since early April’s lows, boosting optimism among investors.
Analyst Robert Breedlove, founder of WiM Media, shared insights via X (formerly Twitter) on the potential for a Bitcoin bull run. He referenced the average breakeven cost data for miners, sourced from Blockware Team, indicating that Bitcoin usually doesn’t trade below this level for long. This is crucial because miners may stop operating if it’s unprofitable. Breedlove mentioned, “In a rational economy, assets rarely trade below their cost of production,” underscoring the importance of this data. The index has found support at significant bottoms from 2016 to 2024, hinting that another price increase for Bitcoin could be just around the corner.
Adding to the bullish outlook, MacroMicro figures show that the 30-day moving average (MA) of the mining cost-to-BTC price ratio is currently at 1.05. This means miners have faced average losses recently, suggesting that as they potentially scale back due to profitability concerns, it may lead to a tighter supply, further pushing prices up. Giovanni, another analyst, remarked on X about the Bitcoin hash rate price model, indicating it’s hitting a support level.
“The fact the hash rate-based BTC valuation is at the support level means we’ve probably reached some kind of local bottom,” he stated. Supporting these projections, Breedlove pointed out that long-term holders had accumulated about 150,000 BTC in the last 30 days, implying reduced selling pressure within the $80,000 to $100,000 range. Such behaviour could apply upward pressure on Bitcoin’s price as demand remains strong albeit with a dwindling supply of available coins.
“Bitcoin’s price is essentially a matter of supply and demand. After a price increase, we see inactive coins begin to move on-chain. Conversely, during downturns, long-term holders tend to accumulate more coins, paving the way for potential price shocks upward,” he added.
Moreover, rising global fiat liquidity is increasing the available capital for Bitcoin investment. ETFs, Bitcoin treasury companies, and convertible bonds are emerging as new financial instruments that facilitate access for potential investors, creating a bridge between traditional finance and the crypto market. Breedlove also commented that liquidity isn’t just limited to USD; it’s rising across all fiat currencies, further highlighting Bitcoin’s status as a global asset.
BeInCrypto recently aligned with this positive sentiment, noting several bullish indicators for BTC. There appears to be a rise in demand, indicating greater buying activity. Additionally, the Market Value to Realized Value (MVRV) ratio has bounced back from the critical mean of 1.74, historically a strong indicator for the start of new bull markets for Bitcoin.
Given the positive developments, BTC’s price performance has been noteworthy. It dropped briefly below 75,000 in early April but has been on the mend since then. Just last week, BTC gained 4.3%, and currently, it’s trading at $97,048, with daily increases recorded at 2.3%.
Historically speaking, the cryptocurrency space can shift quickly, but these signs might just signal an interesting period ahead for Bitcoin enthusiasts and traders alike. Keep an eye on those detailed indicators!
