- Bearish June Bitcoin performance dampens sentiment.
- Historically, a negative June always leads to a positive July for BTC.
- The saying “Sell in May and go away” no longer applies in modern markets.
2024 has been a rollercoaster for Bitcoin, marked by exhilarating highs and sobering lows. The cryptocurrency reached a new all-time high of $74,000 in March, definitively signaling the end of the brutal bear cycle that saw the leading cryptocurrency plummet as low as $15,800.
Since peaking in March, the bull market’s resilience has faced several tests, with June’s monthly performance delivering the latest blow as Bitcoin’s value dipped to $58,500. However, as July begins, BTC has seen a 3% uptick over the last 24 hours, injecting renewed optimism. This positive sentiment is further bolstered by historical data suggesting that July may end in the green.
Is Bitcoin Set for a July Surge?
With the calendar flipping to July, a renewed sense of optimism has swept through the market. Bitcoin opened the new month with a bullish 24-hour performance, reaching an intraday high of $63,800, marking an eight-day high.
Sponsored
This reversal has many investors speculating whether history might repeat itself, given Bitcoin’s pattern of rebounding in July after a downturn in June. Technical analyst Ali noted that, historically, Bitcoin has always experienced a strong recovery in July following a negative June.
Ali’s data highlighted that in the years 2013, 2018, 2020, 2021, and 2022, when June ended in the red, July consistently finished in the green. Additionally, the analyst observed that Bitcoin has averaged a return of 7.98% and a median return of 9.60% in July.
June proved to be a challenging month for Bitcoin investors. The price plummeted to $58,500, while the Fear and Greed Index sunk to a reading of 30 on June 25 and 29.
Sponsored
This downturn was largely attributed to the Fed’s decision to maintain interest rates between 5.25% and 5.5% and Fed chair Jerome Powell’s cautious stance on potential rate cuts.
Despite the potential for a strong July, investors should remain cautious about the months that follow. Historical data shows that August and September have often been challenging for Bitcoin, with 7 out of 11 years closing in the red for August and 8 out of 11 for September.
This sobering reality adds weight to the adage ‘Sell in May and go away,’ indicating that while July might finish strong, turbulence could still be on the horizon in late summer and early fall.
Sell in May and Go Away
The adage “Sell in May and go away, don’t come back until St Leger’s Day” is embedded in investment folklore. It suggests that stock performance tends to suffer between May and October.
Historically, this pattern was thought to result from wealthy London investors leaving for summer vacations and returning only in mid-September for the St Leger’s Stakes, the last major British horse racing meet of the year season. The departure of these influential investors was believed to lead to thinner trading volumes and reduced demand for stocks during the summer months.
While Bitcoin seems to follow this pattern to some degree, particularly in August and September, the same cannot be said for the broader stock market in recent decades. Analysis of the S&P 500 reveals that only 27 out of 80 May-to-October periods have closed in the red since 1957.
This data suggests that the “Sell in May” strategy is unreliable when applied to the stock market in the modern era, challenging the continued relevance of this age-old investment adage.
On the Flipside
- Modern investors use online trading and are never fully away, even on vacation.
- The Fed hinted at a 0.25% rate cut in December, subject to making progress on its 2% inflation rate target.
- Rate cuts are bullish drivers for assets due to increased liquidity and appetite for risk.
Why This Matters
As Bitcoin matures, understanding its historical patterns becomes increasingly valuable for investors. While past performance doesn’t guarantee future results, recognizing potential seasonal trends can inform strategy.
Bitcoin volume sinks to record low:
Bitcoin Weekend Trading Volumes Hit Record Low in 2024
Crypto isn’t discussed in the U.S. presidential debate:
Crypto Gets Cold Shoulder in U.S. Presidential Debate
