Bitcoin likely to remain in red through the next quarter if history is any indication

  • Bitcoin price ended its four-month positive return streak as May noted a negative return of 6.92%. 
  • Historical monthly return suggests that BTC is likely to remain in the red for the next quarter as well. 
  • Based on this data, investors can expect the bull run to restart in October 2023. 
  • With worsening macroeconomic conditions, this bearish outlook might just manifest. 

Bitcoin (BTC) price produced a monthly close at $27,210, noting a -6.92% return for May. The last-minute slide in BTC put an end to the four-month bullish streak that kickstarted the 2023 rally. 

Also Read: Bitcoin Weekly Forecast: BTC delays inevitable crash to $25,000

Bitcoin price and historical returns

Bitcoin (BTC) price faced intense selling pressure in May, which caused it to drop 8.75% from its local top of $29,820. As a result, the month returned a negative 6.92%, ending the four-month positive streak for BTC.

As hopes of a bull run diminish, more investors could join the selling spree, triggering a sell-off. Or, Bitcoin price could consolidate, making it boring for day traders and investors. Historical data is key when measured over a large enough timeframe and reflects investors’ sentiments, which often tend to be cyclical. 

Over the last 14 years, the highest average return for Bitcoin price is roughly 38% in November. Following this is 36% in April and 26% in October. Likewise, quarters one and four display the best returns for Bitcoin price. A simple conclusion from this would be that the first and third quarters are typically the best time to invest in cryptocurrencies

BTC average monthly and quarterly returns

BTC average monthly and quarterly returns

The monthly return table for Bitcoin price not only shows the big-picture outlook but also adds structure to the chaos of everyday volatility. As seen in the image below, the average return for BTC slumps after April all the way up to September. But in the last quarter, the average monthly return picks up steam.

A simple conclusion one can draw from this is that the next three months are likely going to be in the red or barely breaking even. The former seems more plausible when factoring in the worsening macroeconomic conditions. 

BTC monthly returns

BTC monthly returns

Read more: China coin narrative in play as Coinbase CEO warns of restrictive US crypto policies

Macroeconomic economic conditions worsen

In hindsight, Covid-19 seems to be the starting point of what is happening in the world. Due to the sudden halt in the economic machine, central banks across the world started worrying about an impending recession. To prevent a catastrophic breakdown of world economies, central banks decided to grease the economy by printing and distributing money to failing banks, businesses and people. 

While money printing did the trick, it took a heavy toll on inflation. The year-over-year Consumer Price Index (CPI), or inflation in the United States, peaked at 9.1% in 2022. Similar ripple effects were seen in economies across the world that resorted to printing money out of thin air. 

Central banks have been trying to curb the inflation. The US Federal Reserve has been curbing inflation by raising interest rates, which is reminiscent of the Great Recession of 2008 - 2009. Similar hikes in interest rates in 2008 caused the banks to fail, which had a domino effect causing the housing market bubble to pop. The panic was soon followed by a recession in not just the US but across the globe. 

Likewise, the recent hikes by the Fed caused many popular US banks to close up shops, which caused panic among retail investors. Now, the latest in a long line of crisis is the US Debt Ceiling; the US House of Representatives has voted to remove the $31.4 trillion ceiling, which received bipartisan support. 

Read more: S&P500 Futures grind higher, yields stabilize as US House of Representatives pass debt ceiling deal

Closing thoughts

Based on the historical data and macroeconomic conditions, the outlook for Bitcoin price does not look good. So, investors can expect the next three months to be so-so. But from a long-term investment perspective, Q3 is likely to provide plenty of opportunities to accumulate BTC and other altcoins before the 2023 bull rally kickstarts in  Q4.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content

Recommended Content

Editors’ Picks

Solana congestion troubles could end soon, testnet v1.18.11 release arrives

Solana congestion troubles could end soon, testnet v1.18.11 release arrives

Solana network is plagued by failed transactions caused by congestion issues on the blockchain. The recent rise in popularity of Solana-based meme coins has resulted in a massive increase in user activity on the SOL blockchain, which has exacerbated the issue. 

More Solana News

Bitcoin meme coin PUPS hits new all-time high as Ordinals tokens see massive spike

Bitcoin meme coin PUPS hits new all-time high as Ordinals tokens see massive spike

Pups, a BTC-based meme coin, hit a new all-time high of $84.08 early on Friday. The Ordinals Inscription project, which was launched nearly a year ago, sees gains from anticipation surrounding Bitcoin halving.

More Bitcoin News

XRP price tests $0.60 support as AMM makes comeback on XRPLedger

XRP price tests $0.60 support as AMM makes comeback on XRPLedger

Ripple sees AMM back in action on the XRPLedger mainnet after amendment on Friday. XRP price tests $0.60 support, price ranges below $0.62 on April 12. Ripple CLO shared the Second Circuit Court of Appeals refusal to reconsider their decision, considered a loss for the SEC. 

More Ripple News

Robert Kiyosaki steers clear from ETFs, opts for holding Bitcoin directly instead

Robert Kiyosaki steers clear from ETFs, opts for holding Bitcoin directly instead

Robert Kiyosaki, author of Rich Dad Poor Dad, is popular for his investment advice and pro-Bitcoin stance on social media platform X. Early on Friday, Kiyosaki shared his thoughts on Bitcoin ETFs and advocated holding the asset directly, instead of a “Wall Street” version. 

More Cryptocurrencies News

Bitcoin: BTC’s rangebound movement leaves traders confused

Bitcoin: BTC’s rangebound movement leaves traders confused

Bitcoin (BTC) price has been hovering around the $70,000 psychological level for a few weeks, resulting in a rangebound movement. This development could lead to a massive liquidation on either side before a directional move is established. While Bitcoin’s long-term outlook remains positive, bouts of volatility could bring prices down ahead of the upcoming halving.

Read full analysis