Usually in May each year, traditional financial markets experience a downward trend; But digital currencies have performed well so far this month. For the next 30 days, however, historical data show the possibility of a new downward trend.
According to Kevin Desk, investors often face the question in May: “Isn’t it better to sell my assets and exit the market?” However, based on the analysis of seasonal fluctuations, this old investment view of bitcoin is not applicable.
Analyzing the data from the intra-chain index from July 2010 to July, it can be seen that the price of bitcoin in May (May) has increased by 7 years from the last 11 years.
Historically, May is the fourth highest month for bitcoin, with an average increase of 289% in 11 years.
Alex Kupcikevich, senior analyst in the digital currency market at FxPro, said in an email to Kevin Desk:
Seasonal may be considered a successful period for bitcoin. In the last 11 years, bitcoin has increased 7 times and decreased only 4 times.
The average increase in the price of bitcoin during this period was 27%, and the average decrease was 16%. However, the target price for bitcoin at the end of May this year is between 32,000 and 48,000 dollars.
It is important to note that past results do not guarantee future results; As the composition of the bitcoin market has changed significantly since 2020, large institutions and retailers already have a larger share in pricing.
These institutions treat bitcoin as a risky asset and can cash their bitcoins if the US stock market is dominated by sales.
The chart below shows that the S & P500 trend for the second quarter of the Wall Street stock market has always fallen in the second year of each US presidency.
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