Bitcoin usually jumps in May. Here’s why some analysts think this year could be different

“In terms of seasonality, May is considered a relative success for BTC. Over the past 11 years, bitcoin has ended the month up seven times and down four times,” Alex Kuptsikevich, senior market analyst at FxPro, told CoinDesk.

Although it’s impossible to predict the future performance of any asset, Kuptsikevich estimates Bitcoin will trade between $32,000 and $48,000 by the end of this month. Kuptsikevich said he based this prediction on the cryptocurrency’s average rise of 27% and average decline of 16% every May, for total gains of around 11%. As of Monday evening, Bitcoin was priced at around $38,528, according to data from CoinGecko.

But this year, some analysts aren’t so certain that May will be as lucky for Bitcoin as it’s been in the past, citing the cryptocurrency’s recent tendency to mirror the stock market, increasing interest rates, the overall macro environment, and general aversion to risky investments right now. 

Ming Wu, CEO of decentralized interest rates exchange Strips Finance, told Fortune that Bitcoin’s 27% average rise in May is “probably a little distorted” by its 149% gain in 2011 when the cryptocurrency was trading at just $3. Those kinds of major price moves were easier then, according to Ming, because of how low the price was to begin with. He thinks taking the median of Bitcoin’s historical performance in May, or the midpoint of the data set, rather than its average, might be more telling. 

“The median move of 3.4% probably paints a much more accurate picture of what to expect from BTC in May as financial conditions continue to tighten,” Ming said. In the last five months, we’ve seen a “risk-off environment,” where investors flee from risky assets and turn to safe-haven assets like gold. That has impacted Bitcoin, which is anything but safe. So, to Ming, the potential for a 3.4% gain would be a best-case scenario for the cryptocurrency.

Bitcoin has also moved with the stock market for the past few months. Bitcoin, just like the stock market, recently reacted negatively to plans from the U.S. Federal Reserve to reduce its balance sheet and raise interest rates. And that is likely to happen again this month.

“The market is expecting an aggressive hike this week, and most markets could remain under pressure,” Armando Aguilar, head of alternative strategies at Ledn, a digital asset financial services company, told Fortune. “In these types of market conditions, a lot of financial assets trade in close correlation. Not surprisingly, Bitcoin’s correlation to the S&P 500 is near its all-time high.”

Lucas Outumuro, head of research at IntoTheBlock, a crypto market analysis firm, agrees that the Fed’s interest rate decisions are playing a prominent role, and isn’t convinced that any price boost to Bitcoin will happen soon.

“Frankly, until the market starts looking past the impact that [quantitative tightening] and raising rates will have, I find it difficult for Bitcoin to establish a broader up-trend,” Outumuro told Fortune.

“Generally, these projections based on monthly seasonality are not strong enough to draw conclusions,” he added. “We saw the same type of analysis pop up showing how December tends to be a great month for crypto prices, and it was everything but that.”

Bitcoin dropped 19% in December, which was its largest monthly loss since May and its worst December since 2013.

Michael Safai, managing partner at Dexterity Capital, a crypto proprietary trading firm, says that economic data across the board is “too gloomy” for cryptocurrency traders to consider any upside right now. And he emphasized Bitcoin’s relationship to the traditional stock market. 

“The upside momentum for Bitcoin will need to come more from stock performance, and yet, stocks can’t seem to find their own footing,” he said. “Bullishness and belief in the fundamentals of crypto won’t send prices skyrocketing in May or June.” 

Safai does think, however, that any price drop in Bitcoin will be looked on by supporters as an opportunity to buy at a discounted rate. He’s already seeing consistent buying on late 2022 and early 2023 crypto options, which are contracts that allow investors to buy or sell a crypto asset at a set date and price level. That indicates that investors are likely hopeful for future crypto prices, including Bitcoin, he said.

“Perhaps the expectation is, by then, the results of the Fed’s rate experiment will be clear and macro sentiment will improve,” Safai said, referring to later in the year. 

Matt Hougan, chief investment officer at Bitwise Asset Management, agrees.

“If the macro conditions calm down or normalize, I think we could have a strong summer,” Hougan told Fortune. “But right now, those macro factors are so strong that I don’t think the normal rules apply.”