Bitcoin is rebounding nicely this month, back above $40k and up 25% from its early April bottom. This powerful rebound is a clear sign of the changing sentiment among investors. Now, large-scale investors—dubbed whales—are leading the charge on this resurgence. Their massive hoarding of Bitcoin has assisted in keeping the value above the all-important $60,000 barrier. This frenetic pace of deal making indicates a growing shift from the trepidation that gripped the market earlier in this month.

As highlighted by our last piece on the cryptocurrency market, investor sentiment is experiencing a significant shift under Bitcoin’s leadership. Underneath this shift are several positive divergence signals, indicating that the long-running recovery may have at least some further upside left. As April’s days slip away, excitement now shifts to the skies as Bitcoin prepares to skyrocket with the calendar’s turn to May.

Whale Activity and Market Dynamics

Bitcoin's accumulation score among wallets holding between 1,000 to 10,000 BTC has steadily increased throughout the second half of April. This behavior illustrates that institutions are indeed walking the walk and taking part in the Bitcoin bull market.

So far, large players have been buying into this rally. - Glassnode

The dramatic downturn in Bitcoin balances on exchanges illustrates this current macro trend perfectly. This indicates that investors are intentionally selecting and NOT actively TRADING their assets.

Sentiment Shift and ETF Inflows

Sentiment has shifted noticeably, from a level of extreme fear through the pandemic, to now a more neutral sentiment. This is certainly evident in their sentiment score, which increased a whopping 37 points from 15 to 52. Yet two other indices also strongly corroborate this change in sentiment. Most obviously, a significant color shift from yellow to blue on applicable charts indicates that the sentiment score has peaked at 0.7.

Bitcoin ETFs just got a whole lot cooler! They have seen five days in a row of positive inflows, signaling that institutional players have returned to the party. Bitcoin balances on exchanges have recently reached their lowest level since February. This uptick is a positive sign, hinting that investors are taking their assets off exchanges and betting on future price hikes.

Potential Headwinds and Future Outlook

Despite the positive trends, uncertainties remain. Wild card—really, a joker—macroeconomic factors are involved. Tariffs and changes in interest rates might have the most immediate and drastic effects on the Bitcoin market. These external pressures can add sufficient volatility to throw the broader recovery into at least some question.

Shortly after come the capital markets’ version of “sell in May” taking a high-drama turn. It is an indicator that Bitcoin tends to do worse in the month of May, judging by historical trends. Investors should continue to stay alert and wary of these possible headwinds as they invest in the changing market environment.