Bitcoin, after surging through the first couple of months of the year, has lost momentum in March.
The bitcoin price, up almost 500% since its latest bull run began in October, climbed to an all-time of just over $60,000 per bitcoin this month but has stopped breaking fresh ground with the regularity it did through January and early February.
Now, with historical bitcoin price data showing March losses are often followed by an April rally, bitcoin traders and investors are feeling upbeat.
“As with any month, the potential price prospects of bitcoin can be split into a number of different thought processes,” says Danny Scott, the chief executive of the Isle of Man-based bitcoin and cryptocurrency exchange CoinCorner, speaking via Twitter DM.
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“Time of the year can be a factor and the month of April is always highlighted, as it’s the end of the U.K. and U.S. tax year,” Scott says, adding that “taking history into account, it very well may stack up.”
Analysis of price data over the last ten years reveals a 51% average gain for bitcoin in April, according to Scott. If this plays out, this would mean bitcoin ends April 2021 at just over $80,000.
“There have only been two negative Aprils since bitcoin began—in 2014 (-6%) and 2015 (-4%)—which is tied coincidentally with the following month of May with only two negative months—2015 (-1%) and 2018 (-18%)—so maybe there is some momentum and truth from this.”
Scott also notes that these negative Aprils and Mays came during bitcoin bear markets and “current industry sentiment” should be factored in.
“At the moment we’re very much in a bull period with consistent momentum building each week,” Scott says, pointing to high-profile billionaires like Tesla’s Elon Musk and Twitter’s Jack Dorsey giving bitcoin their backing, Wall Street giants rolling out bitcoin services, and countries around the world continuing to flood the system with freshly-printed cash.
However, others are less confident that bitcoin’s strong performance in April each year is anything more than a coincidence.
“I don’t really have a good reason [for why bitcoin historically climbs in April],” says Bobby Ong, chief operating officer at bitcoin and cryptocurrency price data site CoinGecko, speaking via Telegram. “Perhaps the only thing I can think of is that historically bitcoin tends to underperform in March, so April sees a rebound in price.”
Ong warns that this “historical coincidence” could mean bitcoin traders and investors base future predictions purely on past trends.
“If enough people think that March will underperform and take appropriate steps, then actual performance will underperform too,” Ong says.