Bitcoin’s price is precariously placed above $43K into the second week of the historically favorable month of April. While some analysts call for an extended correction based on macro factors, a look at Bitcoin’s NVT and circulating supply indicate that a price rally could surprise critics going forward.
Like any other asset, Bitcoin’s price is subject to seasonal changes as investors alter their risk appetite. April, May, and June have been generally favored Bitcoin prices over the past few years. Notably, BTC recorded its second-highest ever peak at $65,000 during the same month last year as well.
However, the market dynamics were slightly different this time around. Last year, Bitcoin’s price made news peaks every month leading to May as part of a massive bull run. Currently, Bitcoin’s price was teetering between $35K, $45K, and $48K, with clouds of a bear market yet to fully clear.
These opposing market cycles shroud the king coin’s future trajectory but certain metrics suggest that the upcoming months could line up favorably for crypto investors.
Firstly, sentiment among traders is expected to be favorable over the coming days after Honduras became the latest country to accept Bitcoin as legal tender. The country neighbors trendsetters El Salvador which became the first country to adopt Bitcoin as a valid means of payment.
Bitcoin – Supply & NVT Indicate Bullishness
Secondly, the percentage of Bitcoin supply that had not moved in a year hit an ATH of 63.46%, suggesting that investors refused to bow down to FUD despite several macro dangers present over the past year. Crypto analysts under the pseudonym Plan C opined that a price uptrend has usually followed after such readings.
Furthermore, Bitcoin’s Network Value to Transaction (NVT) ratio flashed a bullish divergence during the first week of April, indicating that the amount of value transferred on the BTC network was higher compared to its market cap. Data aggregator Santiment argues that an asset looks ‘bullish’ once its NVT touches the yellow-green bands.
Conclusion
Global macro uncertainties, stemming from Russia’s invasion of Ukraine and a cautious Federal Policy outlook, have contained BTC’s price thus far in 2022. However, April could bring about the much-needed change of fortunes for Bitcoin. The key level to overcome resides at $53K and a breakout would bolster BTC changes of setting a new ATH.