In recent days, Bitcoin has experienced a significant breakout, fueling optimism among traders and pushing expectations towards a possible reach of the psychological threshold of $100,000. However, as the month of May approaches, some analysts urge caution, recalling an old saying in financial markets: “Sell in May and go away”.
This expression, originating in the early years of the London Stock Exchange, suggests selling one’s positions in May and then re-entering the markets in autumn, due to the historical tendency for weaker performance during the summer months. Although originally referring to traditional stock markets, this seasonality seems to extend to the world of cryptocurrencies, Bitcoin included.
The meaning behind “Sell in May and go away”: stop to the race to $100,000 for Bitcoin?
The saying “Sell in May and go away” is based on historical data showing how U.S. stock markets tend to record lower returns between May and October compared to the November-April period. The causes are manifold: lower trading volumes, less institutional activity, and a general reduction in volatility.
According to Jeff Mei, COO of BTSE, “historically, the coming months have been weak for financial markets, with many investors following the proverb.” However, Mei also points out that this year could be an exception, considering that Bitcoin has already reached $97,000 and some growth-related stocks are showing signs of recovery. Despite this, recent data on the US GDP indicates a possible risk of recession, which could be mitigated by potential interest rate cuts.
Bitcoin and seasonality: what the data say
The cryptocurrency market also seems to be affected by these seasonal dynamics. According to CoinGlass data, Bitcoin has often shown weak or negative performance in the month of May in recent years:
- In 2021, BTC lost 35%, marking one of the worst months of the year.
- In 2022, the decline was 15%, due to the collapse of the Luna ecosystem.
- In 2023, the month was flat or slightly positive, with contained volatility.
There have been exceptions: in May 2019, Bitcoin rose by 52%, one of the best post-2018 performances. However, negative May months are often followed by further declines in June: in the last five years, four out of five June months closed in the red.
These data do not guarantee future performance, but suggest that the cryptocurrency market is becoming increasingly sensitive to macroeconomic cycles and seasonality, just like traditional stock markets.
Altcoin and meme coin: greater vulnerability
In addition to Bitcoin, altcoin — particularly meme coins — could also be exposed to corrections in the coming months. After a first quarter characterized by euphoric rallies, often fueled by speculative flows, investors’ attention might shift towards more stable assets, leaving room for significant retracements.
According to Vugar Usi Zade, COO of the exchange Bitget, “since 1950, the S&P 500 has recorded an average gain of just 1.8% from May to October, with positive returns only 65% of the time.” This data, although referring to the stock market, is useful for understanding how seasonality can also influence investor sentiment in cryptocurrencies.
Quarterly performance: a broader picture
Analyzing the quarterly performance of Bitcoin over the last 12 years, further interesting insights emerge:
- The second quarter (April-June) recorded an average return of 26%, but with a median of only 7.5%, indicating strong volatility driven by exceptional events.
- In the third quarter (July-September), the average drops to 6%, with a slightly negative median, suggesting a phase of consolidation or post-rally fatigue.
Zade emphasizes that the **fourth quarter (October-December)** historically represents the strongest period for Bitcoin, with an average return of 85.4% and a median of 52.3%. This reinforces the idea that May could mark the beginning of a phase of temporary weakness, before a possible autumn recovery.
Market psychology and self-fulfilling prophecies
Even though the Wall Street calendar does not dictate the rules of the crypto market, investor psychology plays a crucial role. If enough traders start to believe in the validity of “Sell in May,” this behavior could become a self-fulfilling prophecy, amplifying sales and accentuating volatility.
Furthermore, if the technical signals begin to deteriorate and sentiment reverses, the proverb might gain even more strength, prompting further sales and consolidations.
An uncertain scenario, but not without opportunities
In summary, while the enthusiasm for a Bitcoin at **$100,000** continues to grow, historical data and seasonality suggest maintaining a cautious approach. The proverb “Sell in May and go away,” although originating in a completely different context, seems to resonate even in the world of cryptocurrencies.
With the increase in institutional participation and the integration of crypto markets into global macroeconomic cycles, Bitcoin and other cryptocurrencies are no longer immune to seasonal dynamics. For investors, this means closely monitoring data, avoiding euphoria, and considering more sophisticated risk management strategies in the months to come.