According to CryptoPotato, Bitcoin's price, which recently dipped, has started to recover, sparking speculation about a potential rally in May. Despite a promising start to the year and a surge to an all-time high price in March, Bitcoin's progress stalled in April. The primary cryptocurrency began May on a shaky note, declining to $56,800, the lowest level in nearly two months. However, the last few days have been slightly more optimistic, with Bitcoin reclaiming some lost ground and briefly spiking towards the $60,000 mark.
ChatGPT, a popular AI-powered chatbot, was asked about the possibility of a more substantial rally and a new all-time high for Bitcoin this month. While the chatbot did not rule out the possibility, it outlined several factors that need to occur for such a price expansion. Favorable regulatory news was mentioned as a top contributing element. The approval of additional ETFs could result in a resurgence, according to ChatGPT. Another regulatory development that could positively impact the entire cryptocurrency market is a decisive victory for Ripple in its legal battle against the SEC.
The second most important factor named by ChatGPT is institutional adoption. Increased adoption by large institutions, such as investment funds, banks, or corporations, can lead to significant inflows of capital into Bitcoin. Technological advancements, market sentiment, macroeconomic conditions, and supply dynamics were also added to the list of essential elements.
Multiple indicators suggest that Bitcoin's correction might not last long. One example is the MVRV (Market Value to Realized Value) metric, which has been experiencing a downfall since the beginning of April. A score above 3.5 suggests that the Bitcoin price is close to its peak, whereas a result below 1 warns about a bottom. The MVRV ratio plunged to 1.87 on May 2, flashing the buy signal for the asset. Another sign is the Bitcoin exchange netflow, which has been predominantly negative in the past two weeks. Shifting from centralized platforms to self-custody methods is considered bullish since it reduces the immediate selling pressure. The halving that took place last month, following which the miners’ rewards for validating blocks on the blockchain were slashed in half, has historically been a precursor of a major revival of the entire crypto sector.
