Does “Sell in May and Go Away” Apply to Bitcoin?

As the month of May rolls around, investors are once again faced with the age-old question: “Sell in May and go away” – true or false? This well-known adage has been around for years, and suggests that investors should sell their assets in May and move to cash or other less risky assets for the summer months. While this principle is best known for stocks, there has been growing interest in whether it applies to other assets, such as Bitcoin.

A quick look at the history of Bitcoin shows that the principle of “sell in May and go away” does not appear to apply directly to the world’s most famous cryptocurrency. Looking at the chart of every candle of the month May over the last 12 years of Bitcoin’s history, it becomes clear that there is no clear pattern that emerges. Out of the 12 candles, seven are green and five are red. While this may suggest that the principle does not work for Bitcoin, there are a few nuances worth considering.

Source: CryptoQuant

Firstly, the size of the green candles appears to be diminishing, indicating a potential decline in Bitcoin’s maximum gains. This suggests that the principle may still hold some merit, but it may not be as effective as it once was. Secondly, during the last two years, both candles have been red, suggesting a significant sell-off occurred in the month of May. While this could be a coincidence, it is worth noting as it may indicate a change in the trend.

Despite these nuances, it is important to note that the principle of “sell in May and go away” does not seem to apply very strongly to Bitcoin. Whether we see a green or red monthly candle, history does not show a clear pattern for the cryptocurrency. However, it is worth noting that the original principle takes into consideration selling in May and buying again after the summer, for example in November. Further research into that strategy may shed more light on whether it is effective for Bitcoin or not.

In conclusion, while the principle of “sell in May and go away” may work for some assets, it does not seem to apply strongly to Bitcoin. Investors should do their due diligence and analyze market trends and other factors before making any investment decisions, regardless of the time of year.

Read more:

Join us on Telegram

Follow us on Twitter

Follow us on Facebook

Follow us on Reddit

You might also like