Bitcoin (BTC) is showing signs of a potential bullish trend in May, driven by key indicators. Experts have highlighted factors such as miner economics, network hash rate, accumulation by long-term holders, and increasing global liquidity of fiat currencies, suggesting a possible price rise.
This occurs against the backdrop of a continuing recovery rally for the largest cryptocurrency since early April, when the price rose by 14.6% over the past month.
Is the Bitcoin Bull Market Returning?
In a recent post on X (formerly Twitter), analyst and founder of WiM Media Robert Bridlaw referenced data on the average breakeven cost for miners from the Blockware team to predict that Bitcoin may be on the verge of a bull market.
He noted that the price typically does not stay below this average for prolonged periods, as this is the threshold at which miners may cease operations if they are unprofitable.
"In a rational economy, assets rarely trade below their production cost," Bridlaw noted.
He emphasized that the index accurately identified six days between 2016 and 2024. Importantly, it signals another minimum, indicating a possible increase in Bitcoin's price. MacroMicro data further confirms this. At the time of writing, the 30-day moving average (MA) of the mining cost to Bitcoin price ratio was 1.05.
This indicated that miners, on average, operated at a loss over the past month. Therefore, this could potentially lead to a price increase as miners operating at a loss reduce their volumes, decreasing supply.
The Bitcoin price model based on hash rate, which estimates the value of Bitcoin based on the historical ratio between its price and hash rate, adds to the bullish forecast.
Analyst Giovanni commented on X that the model is currently at a support level for Bitcoin. Additional market signals reinforce the possibility of a rally. Bridlaw noted that long-term holders have accumulated approximately 150,000 BTC over the past 30 days. This indicates a reduction in selling pressure in the range of $80,000 to $100,000.
As fewer people are willing to sell Bitcoin at these levels, the price may face increased pressure as demand remains strong while the supply of available Bitcoin decreases.
"At its core, the price of Bitcoin is simply a function of supply and demand. After a price increase, you start to see previously inactive tokens moving on-chain. Conversely, after prolonged periods of sideways or negative price movement, long-term holders begin to accumulate more tokens, creating conditions for supply shock and increased price pressure," he added.
Additionally, the increase in global liquidity of fiat currencies expands the pool of capital available for investing in Bitcoin. This is further supported by exchange-traded funds (ETFs), Bitcoin treasury companies, and convertible bonds.
These financial instruments provide easier access to new liquidity in the Bitcoin market, connecting traditional finance and cryptocurrency.
"And it's not just USD liquidity that is increasing – liquidity of all fiat currencies is rising, and Bitcoin is a global asset," Bridlaw stated.
Recently, BeInCrypto also highlighted several bullish factors for BTC. The obvious demand for the token has turned positive, indicating an increase in interest or buying activity for Bitcoin.
Additionally, the market value to realized value (MVRV) ratio has recovered from a historically significant average of 1.74. This movement has previously proven to be a reliable indicator of early stages of a bull market for Bitcoin.
Among these bullish signs, the price dynamics of BTC have been quite remarkable. After a brief drop below the 75,000 mark in early April, the price continued to recover. Over the past week, Bitcoin increased by 4.3%. At the time of publication, the trading price of Bitcoin was $97,048, representing a daily gain of 2.3%.#Write2Earn #BinanceSquare #Squar2earn #Binance #bitcoin $BTC
