Bitcoin’s price action has entered a critical phase as one prominent crypto analyst warns that the leading digital asset may be approaching a major turning point. A familiar seasonal adage is being revived, with a bearish target looming that would erase nearly two years of gains.
What to know
- On May 2, 2026, analyst Merlijn The Trader posted on X that Bitcoin may soon face a sharp correction, urging traders to “sell in May and go away.”
- The analyst set a downside target near $33,000, one of his lower-cycle projections, representing a potential drop of over 57% from current levels.
- The warning is based on a recurring historical pattern that has marked major bullish turning points in past BTC cycles.
- Bitcoin has been consolidating around the $78,000 zone after a net positive April, but technical signals like the TD Sequential flash a bearish indication.
- Meanwhile, global equity funds saw over $15 billion in inflows in the week through April, suggesting a rotation out of risk assets like crypto.
- The “sell in May” strategy, a well-known stock market adage, is now being applied to the crypto market with potentially severe consequences.
The ‘Sell in May’ Signal for Bitcoin
The phrase “sell in May and go away” has long been a staple of equity market folklore, advising investors to reduce exposure during the historically weaker summer months. Now, that same logic is being applied to Bitcoin by a crypto analyst who sees history repeating itself. On May 2, 2026, Merlijn The Trader took to X to sound the alarm.
“The pattern is clear. BTC has followed this seasonal rhythm multiple times in the past, and the current setup suggests another major drop is imminent.”
He argues that Bitcoin could be on the verge of a correction that drives prices down to $33,000 — a level that would represent a significant decline from the current consolidation zone around $78,000. That would mark a drop of over 57% from present values, if the target is realized. The analyst’s call is not just about a single price prediction; it is rooted in what he describes as a “recurring historical pattern” that has preceded major bullish turning points in past cycles. By identifying these patterns, he aims to give traders the best possible exit points.
But is the “sell in May” strategy truly applicable to a 24/7, highly volatile asset like Bitcoin? Critics argue that crypto markets operate differently, with their own seasonal tendencies often tied to halving cycles, network fundamentals, and regulatory news. However, the correlation between BTC and traditional markets has grown stronger over time, especially as institutional adoption increases. The adage itself has limited empirical support in crypto, but that does not stop traders from acting on it. In 2021, Bitcoin peaked in April and then corrected over 50% by July. In 2022, the collapse began in May after the Terra/LUNA crash. While these are anecdotal, they contribute to the narrative.
A $33,000 Target: Analyzing the Bearish Scenario
The $33,000 level is not arbitrary. Merlijn identifies it as one of his lower-cycle projections, meaning it reflects a scenario where market conditions turn decisively bearish. To put it in perspective, Bitcoin last traded near $33,000 in early 2023, before the approval of spot ETFs and the subsequent rally. Revisiting that zone would effectively erase almost all gains made in the past two years.
The implications are staggering. A drop to $33,000 implies a market capitalization loss of hundreds of billions of dollars. For long-term holders, it would test resolve. For traders, it presents both a risk and an opportunity — if they can time the exit correctly.
Supporting this bearish view, the TD Sequential indicator recently flashed a key bearish signal on the BTC chart, as reported by NewsBTC. The TD Sequential is a popular technical analysis tool used to identify trend exhaustion and potential reversals. When it gives a sell signal at the end of a bullish move, it often precedes a downtrend.
The combination of a bearish TD Sequential signal and the seasonal warning from Merlijn creates a compelling case for caution.
However, not all technical signals align. Bitcoin continues to hold the $78,000 support level, and the net positive performance in April shows underlying strength. The market remains in a tug-of-war between bulls who see the consolidation as a launchpad for new highs and bears who view it as a distribution phase.
Historical Patterns and the Analyst’s Core Thesis
Merlijn The Trader is not a household name like some crypto influencers, but his analysis on historical patterns has garnered attention. He claims that the same pattern that marked major bullish turning points in BTC is now signaling the opposite — a major bearish turning point. This pattern involves the alignment of seasonal tendencies, market cycles, and on-chain metrics.
The analyst suggests that by studying past cycles, traders can pinpoint the best moments to sell for maximum return. This implies a market timing strategy that is notoriously difficult even for professionals. Yet, his confidence in the $33,000 target is notable. He explicitly states that these past patterns can be used to determine the best exit points for traders in the ongoing cycle.
“If history is any guide, the window for selling is now,” he stated.
But historical patterns are not guarantees. Each market cycle has unique drivers: the 2021 rally was fueled by stimulus and retail speculation; 2023–2024 saw institutional adoption through spot ETFs; 2025 brought new regulatory clarity. The applicability of past seasonal patterns to a rapidly maturing asset class is an open question.
The Broader Market Picture: Consolidation and Fund Flows
Timing the market is never about a single signal. The broader macro environment plays a crucial role. Recent data from global equity funds shows over $15 billion in inflows during the week through April, as reported by Cryptoslate. This “risk-on rotation” into equities could be draining capital from alternative investments, including Bitcoin.
Institutional flows are a double-edged sword. While they provide legitimacy, they also tie BTC more closely to traditional risk assets. If a sell-off in stocks occurs, crypto often follows. The current rotation into equities may be a precursor to a broader risk-off move later in the year.
Additionally, Bitcoin’s consolidation around $78,000 is occurring in a low-volatility environment. Low volatility often precedes explosive moves, and the direction is anyone’s guess. The TD Sequential signal adds weight to the bearish side, but the consolidation itself could also be seen as accumulation before a breakout higher.
The divergence between rising equity inflows and persistent crypto consolidation highlights the uncertainty. Some traders interpret the equity rotation as a sign that institutional money is shifting away from crypto in the short term, a headwind for BTC prices.
Risk Mitigation: How Traders Are Responding
Given the warning, what can traders do? Merlijn urges selling before the potential drop. Risk mitigation strategies include reducing long positions, setting stop-losses below $78,000, or even opening short positions. For long-term investors, partial profit-taking may be prudent.
Diversification is another option. Moving a portion of holdings into stablecoins or other uncorrelated assets can cushion the blow if BTC does fall to $33,000. The key is to avoid panic selling but to act on probabilities.
It is important to note that not all analysts agree. Some expect a breakout above $100,000 before the end of the year. The divergence in opinions highlights the uncertainty. The best approach for many may be to size positions conservatively, set clear exit rules, and stay nimble.
The “sell in May” advice is specifically aimed at maximizing returns by locking in profits early. For those who are already in profit from lower levels, the cost of exiting early is opportunity cost; the cost of not exiting could be a severe drawdown. Each trader must weigh these risks based on their own risk tolerance and time horizon.
Conclusion: Preparing for Volatility
Bitcoin stands at a critical juncture. The “sell in May” warning from Merlijn has injected a new sense of caution into the market. Whether he is right or wrong, the very existence of such a high-profile bearish call can influence trader behavior and become a self-fulfilling prophecy.
The coming weeks will be telling. If BTC fails to hold $78,000 and breaks down, the path to $33,000 becomes more plausible. If it rallies, the “sell in May” narrative will be dismissed as noise. Either way, volatility is coming.
For now, the prudent approach is to respect the warning, monitor technical signals like the TD Sequential, and prepare for both scenarios. The market cycles of Bitcoin have repeatedly shown that those who ignore historical patterns do so at their own risk. Whether this time is different remains to be seen, but the clues are on the table.
