The digital asset market is experiencing a severe downturn, with traders frantically selling off assets, which has resulted in a loss of over $160 billion in total cryptocurrency market capitalization since Friday.
Several factors have contributed to this collapse as we near the end of the first quarter of the year, including threats of tariffs from Trump, worries about the global economy, and a lack of clear drivers for future price increases.
However, looking to the past, there may be a beacon of hope as we approach the second quarter, with April historically offering a potentially bullish environment for cryptocurrencies.
Historically, April has averaged a 27% return for Bitcoin since 2010, making it the third most favorable month for gains, following November and May, which typically see approximately 38% and 26% returns, respectively.
As an analyst pointed out, this seasonal trend could serve as an encouraging sign for the market as it seeks reversal.
“While seasonal effects aren’t standalone indicators of market behavior, they gain significance when accompanied by other factors, like the recent decrease in selling from long-term holders,” the analyst stated.
One potential disruption may arise from the notorious exchange Mt. Gox, which has begun transferring large amounts of Bitcoin to its wallets, raising concerns about potential sell-offs by creditors.
“A short-term risk could be linked to Mt. Gox, given its recent transfers of sizable Bitcoin quantities to Kraken. This could induce temporary selling pressure or market fluctuations,” commented the CEO of Deribit.
Read more: Expert says it’s ‘an excellent time’ to invest in Bitcoin