Introduction: As the financial markets, both crypto and equities, catch their breath after April’s striking correction, should we stay on the sidelines as May gets underway? The well-known expression “Sell in May and Go Away” encourages caution, but we don’t think it should be followed to the letter this year on the bitcoin price.
1) May is far from being an unfavourable month for Bitcoin
The adage “Sell in May and Go Away” is based on a historical observation: stock market performances are generally stronger between November and April than during the months from May to October. However, this does not mean that markets systematically fall during the summer. This is a statistical average, not a certainty.
In other words, if the summer period is on average less dynamic, it can nevertheless have a positive performance. And this applies to both equity and crypto markets, due to correlations. Contrary to popular belief, May is not one of the weakest months in the crypto calendar. Quite the contrary: since the creation of BTC, May has been the fourth best month in terms of performance, behind October, November and April.
2) The May/September period can still have a positive performance
As far as equities are concerned, historical data partly support the reasoning behind “Sell in May”. Since 1945, the S&P 500 index has returned an average of 6.7% between November and April, compared with 2% between May and October. This statistical difference reinforces caution during the summer period. But then again, this is not an absolute rule: some summer months, like July, can post very good results.
What’s more, the growing correlation between traditional assets (such as US equities) and Bitcoin should not obscure the fact that the latter has its own dynamics. In particular, the famous 4-year cycle, structured around halving, which always ends at the end of the year following the last halving, i.e. at the end of 2025 for our current bullish cycle.
3) Bitcoin’s upward momentum could continue into July if the correlation with global money supply M2 continues
Since the April low, Bitcoin has been showing clear signs of recovery. This uptrend is therefore a continuation of the post-halving cycle of spring 2024, a powerful engine seen on several occasions in BTC’s history.
Another element supporting this scenario is the correlation between the Bitcoin price and the evolution of global liquidity, measured by the sum of the M2 monetary aggregates of the major economies. Historically, it takes around 12 weeks for excess global liquidity to be reflected in financial markets. However, recent signs of monetary recovery suggest that BTC’s upward movement could continue until the end of July.
Conclusion: Although historical data suggest a more modest market performance between May and October, there is no evidence of a systematic downturn, least of all in the crypto market. The statistics are clear: May is generally a good month for Bitcoin, and current fundamentals argue in favour of a continuation of the uptrend until mid-summer will perhaps enable a new all-time high to be recorded. This market view would be invalidated in the event of a breach of major technical support at $89/90K.
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