Chapter 1: The Tradition of "Sell in May"

The adage "Sell in May and go away" has been a staple in conventional financial circles for many years. Typically, market prices tend to peak in May, leading to a general decline or stagnation throughout the summer months. People often take a break during this season—enjoying the outdoors, traveling, and spending time with family—resulting in less focus on financial markets.

But how does Bitcoin fit into this scenario? Is it a unique entity that behaves independently from traditional assets, or does it follow the same seasonal trends?

As we examined the aftermath of the COVID-19 pandemic, a common critique emerged regarding Bitcoin's increasing correlation with stocks and broader financial markets. New entrants in the Bitcoin space might be surprised to discover that this correlation was not always the case. Historically, Bitcoin acted as a contrarian asset, often rising in value during times of geopolitical turmoil, inflation spikes, or concerns about interest rates—the very situations it was designed to counter.

However, a noticeable shift occurred post-COVID. In a climate of uncertainty, investors gravitated towards the safety of cash, leading to a greater alignment of Bitcoin's price movements with those of traditional markets. With major Wall Street investors entering the Bitcoin arena, the asset began to mirror the behaviors of these larger financial players, particularly during periods of economic anxiety.

The video You're Being Lied To About Bitcoin | The Next Sell-Off Is Coming... discusses these dynamics and the potential for upcoming market shifts.

This development might lead one to believe that Bitcoin will conform to the traditional summer market trends, adhering to the "sell in May" philosophy. Yet, it’s crucial to recognize that this correlation represents only a fraction of Bitcoin’s overall history. In recent months, Bitcoin has started to demonstrate its contrarian nature once again. For instance, following a wave of bank failures, Bitcoin's value surged from $15,000 to $31,000.

However, shortly after this peak, the price retreated to around $25,000 before climbing again to $31,000, largely driven by BlackRock's application for a spot Bitcoin ETF. Despite this surge, Bitcoin has largely remained in a sideways pattern over the past few months.

Looking back, during the summer following last year’s insolvencies, Bitcoin's price remained stagnant until the revelation of the FTX scandal. Similarly, in 2021, after various market pressures, such as the ESG controversy and China's Bitcoin ban, the price also trended downward and sideways throughout the summer.

Currently, the outlook for Bitcoin appears muted. The next halving event is still a year away, and the approval of a spot ETF may take months. Without significant news or developments, Bitcoin could very well remain dormant for the summer.

Yet, it's essential to remember that Bitcoin thrives on unpredictability. It often defies expectations, whether through sharp price increases, stagnation, or sudden drops. Predicting its movements can be a fool's errand.

So, what do you think? Should you steer clear of Bitcoin this summer?

Follow me on Twitter

Read my articles first on Medium

Thank you for taking the time to read this!