Bitcoin and Altcoins Surge—Is ’Sell in May’ Still the Play?
Crypto markets are heating up as Bitcoin and altcoins notch fresh gains. But with May looming, traders face a classic dilemma: stick with the rally or bail before summer doldrums hit?
The old Wall Street adage—’Sell in May and go away’—doesn’t account for crypto’s 24/7 volatility. While traditional markets nap, Bitcoin’s been known to moon (or crater) on a Tuesday afternoon.
Pro tip: If you’re taking advice from a 19th-century British stockbroker about your DeFi portfolio, maybe rethink your strategy. The only ’going away’ you should do is from oversimplified market tropes.
Is it safe to sell Bitcoin and altcoins in May and go away?
“Sell in May and go away” is a popular phrase in financial markets. It is based on the theory that stocks often underperform in May and during the summer months, as investors travel and stay away from the market.
Seasonality data indicates that Bitcoin’s average return in May is 7.95%, which is lower than the double-digit growth seen in the previous three months. As shown below, the second and third quarters are historically the worst-performing periods for Bitcoin.
Analysts have a mixed outlook for Bitcoin and other altcoins as the recovery continues. In a note, Nansen warned that the ongoing rally could be due to the Fear of Missing Out, which normally happens ahead of a local top.
Ki Young Ju, the founder of CryptoQuant, noted that Bitcoin has not yet broken out. Instead, it is in a wide range and could resume the downtrend unless it jumps above $100,000.
After I said the bull cycle was over, #Bitcoin dropped 10%—but now it’s 10% above where it was when I made that call.
I still think we’re moving within a wide range. If it breaks above $100K, I’ll gladly admit I was wrong. Until then, I’m keeping an eye on the data for a few…
Other analysts are optimistic that Bitcoin could keep rising, citing the expanding M2 money supply and increasing institutional demand. Indeed, spot Bitcoin ETFs have continued to attract inflows, while firms like Cantor Fitzgerald and SoftBank have started investing in Bitcoin.
Bitcoin price technical analysis points to a surge
Technical analysis suggests that it may not be ideal to “sell Bitcoin and altcoins in May and go away.” The weekly chart shows that Bitcoin has formed an ascending channel and recently retested the lower side.
BTC has remained above the key support at $68,845, which marks the upper side of the previous cup and handle pattern. It has also stayed above the 100-day moving average, signaling that bulls are still in control.
Therefore, the coin will likely continue rising and possibly retest its all-time high of $109,285. A move above that level would point to further gains, potentially reaching $125,000.
The main catalyst for this would be progress in trade deals or negotiations with countries like China, South Korea, the European Union, and Japan. These deals could prompt the Federal Reserve to begin cutting interest rates, which would likely boost Bitcoin, altcoins, and stocks higher.
