Sell In May & Go Away…
History Repeating?
If you are only familiar with the Crypto market, you might not know the saying that originated within TradFi and the stock market. A saying that has proven to be fairly accurate over the years when it comes to timing the market. As the saying goes…
Sell in May and go away.
It’s pretty straightforward and doesn’t require much need for interpretation. In other words, simply exit the market in May and only consider re-entering the market in June or July. Even within the Crypto space, this has proven to be a fairly reliable course of action. Historically, Bitcoin has experienced significant corrections in May, including the years that coincided with a halving event.
In the previous cycle, we saw the market experienced a significant correction in March, alongside global markets, as a result of the pandemic. However, we also saw BTC correcting by approximately 40% in May. This was followed by a period of sideways chop, with the markets beginning to heat up in August. The real surge however only kicked off in October. This was the beginning of full bull mode.
Crypto traders are now wondering if indeed we are about to experience a similar scenario playing out. My response is to turn to the charts, and then consider the current pressures from the SEC and other regulatory pressures. Technically speaking, BTC is still bullish on the HTF. The screenshot below displays a bull flag, which is a bullish breakout pattern.
In my mind, a decision before the validation or failure of this pattern might be a little premature. As a result, I am keeping my eye on this formation, as well as the $59K level. If BTC were to lose the $60K level and begin trading at $58K/$59K, I would most likely prepare for further downside. This would need to incorporate a daily close below these levels. Bitcoin has already spiked down to $59K numerous times of late.
If BTC were to close a daily candle below $59K, it would be indicative of a formation failure. Fakeouts are however a common occurrence in this market, and so, if this were to take place, I would be examining the LTF for signs of additional rejections. At this point, I am still observing the charts in anticipation of more definitive indicators regarding future price action.
Final Thoughts
Essentially, traders and investors need to be watching the $59K level. A loss of support at this level is most likely the beginning of a more significant correction. Unfortunately, one cannot watch the market 24/7 and so, Bitcoin’s current range is perhaps a lot more fragile than many may realize. Furthermore, we are currently trading at the bottom of the flag formation, making it even more nerve-wracking.
The likelihood of a deeper dip is the more probable outcome when you consider everything. However, at the same time, Bitcoin is another animal… you can never really write off the possibility of a sudden surge to the upside. This is precisely why I am awaiting a failure or confirmation of this pattern before I make any drastic moves. That’s it for this one. See you next time!
Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.
Posted Using InLeo Alpha
It could be a trap on the market to catch all the short position that enter two early in trade
I am not a financial adviser, but I will caution patience
Happy trade
Thank you for this informative article
I can be totally wrong about my analysis
50/50
Regards
Surprised, that you don't even mention the current market makers, what are basically the usual suspects, govs, banks and top companies through the ETFs and they try to keep price at this level since few weeks, even try to push it down. (they don't buy big chunk on the same day, they buy more, when grayscale sell more etc., so obvious market manipulation - the legal kind, it's ok if they do)
Never thought, i will say it, but thanks to China, HongKong, hopefully they will screw the US etfs market monopolization and manipulation.
It never was more true than today in btc: just watch what the big ones do.
you can screw charts, tech analysis, if etfs, cbs or other big players just decide to buy or sell significant amount. this (endless?) btc circle is about that since months, nothing else. and i don't expect anything else in the future, especially, if worldwide etfs will keep up with the buying volume for a year, what US started in January.
anyway, based on previous circles, we are just passed half-time. but btc is very different this time, not comparable to previous circles at all. it's fully driven by ETFs.
Check the charts.
😀yeah, basically, you were right, i just hope at least 20w moving average will hold. or few other support between 52-57k will hold. on monthly chart itself doesnt look good.
that bloody fed and usd index...
Yeah, that's key... above $52K is fine by me.