Topic: Is "Sell in May" really a good idea (in the case of Bitcoin)? (Read 303 times)

Its always interesting to see that monthly chart for each year posted by d5000 in the op,
but my view is that it all goes out the window when its only a month post halving. We are
in a Bull market now so I'm not selling. I dont trade so this saying doesnt apply to me specially
that we are in a Bull market post halving.

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Funny that!

The market seems to be holding so we should indeed HODL too!

It depends on strategies for capital use and investment plan. If the capital used for investment, is a special assigned part for investment only and the investor has another part for use, no need to sell in May and go away.

Additionally, whales usually to understand psychology of the market very well. They understand how the crowd usually do, like believe in "Sell in May and go away" then they do their manipulation oppositely.

If people have good fund management, individual financial management and have detailed plan for investment, they will not mind about what happen in a single month, like May.

Are you ready for the Bitcoin bull market? What's your plan? Some ideas for you ^newbies

Stay clever, sell never.


That rhyme sounds more like something that would help people not lose out on their investment. Selling in may just because of some superstitious trading thing is ridiculous, and as OP has shown us, makes no logical sense...

There's no problem with selling BTC in May at 65K USD, since you have bought at 20-25K USD in May 2023(I don't even remember the BTC price back in May 2023). You could even HODL and don't sell in May. Even if the price does down in the summer, it will most likely go back up in the autumn or during the winter. I also agree with the theory that the Bitcoin market becomes a little bit boring and stagnant during the summer, but I don't see this as a major problem. A big price crash could happen in every season, it doesn't matter if it's summer or winter.
Timing the market is a mission impossible for more than 95% of the traders, so there's no point of overthinking and overanalyzing the seasonal  patterns of the Bitcoin price.

This may stand true for time being but not everytime just like I believed in a myth that December being worst month for Bitcoin just by checking historic date but this year t turned out to be false and similarly I think we may see the month of "MAY" may not be sell in may month any longer as we cannot narrowed it down on one analysis or historic data as there are just too many factors deciding the market trend.

Cryptorank.io has its table for Bitcoin ROIs in monthly, quarterly too and it seems they built up the tables long time before Newhedge.io team did it for their website.

https://cryptorank.io/price/bitcoin

Yes, if the price of Bitcoin increases above $75,000 is a good idea to release your Bitcoin to make a passive income in this month of May, because market price is dynamic which anything can change in any month, or year for the price of Bitcoin to break correction for investors to witnesses with their two eyes. There is no way the price of Bitcoin will reach $100,000 in this month of May, which is the major target of many investors but if the price increases higher above this current price in the market, I think some investors will still sell to increase their income as they did last two months when the price of Bitcoin increased to $73,238. I believe, it will be more profitable if you can continue holding your Bitcoin till the end of this year before you can release them for sale, because the price will increase higher before the end of this year.

According the past data May might gonna see a correction but according you picture we still see 1% profit from the past month why don't we stack more bitcoin and sell it next month or next year when the bitcoin reach new all time high.

So Sell in May that totally fine if your position already made up around 30% takes your profit a little and buy more "if" the dip really happen in this month

@justdimin, one of the forum members posted this link where you can see interesting information about spot ETFs (US). There are probably some other sources, but I think you can see all the important information on this link.

That is definitely a good reason, I did not know that we had this, usually I do not check what the ETF world is doing and honestly I do not know where you guys are finding out that data, is there like some website that shows how much money went in or out of ETF world for specific days? If there is one, I would like to learn where you guys are checking in.

Back to the topic at hand, if there has been four days in a row of positive movement there, then I guess that it will definitely be something to benefit you as well, it should definitely be something that could grant you a greater result. I prefer to keep it in just the crypto world, but the wall street world getting into definitely helped us along the way during this period.

It starts with traditional markets and I have different view on it like most of people who believe in this mythical saying.

Capital in society will switch from one or some markets to another or other markets. People mostly don't have enough patience and discipline to keep their capital inactive for a long time.

If they do things like "Sell in May and go away" in, for example, stock market, they will find another market as a new destination for their capital. It can be Bitcoin & Cryptocurrency market.

This is something that is definitely being talked about a lot, and I hope that interest rates in the US will go down as soon as possible, because here in the EU, most such decisions are made only after the US, and considering that I live in a country that depends a lot on tourism, the prices of products and services usually go wild in the summer months because the demand generated by tourists is an excellent opportunity for extra earnings.

As I can see, it is already the fifth day in a row that we have recorded positive inlows in spot ETFs, so even though it is not even close to what happened in February and March, it still has an evident effect on the price.


I sincerely doubted that such a thing existed, maybe some people have such information, but do not share it publicly. It seems to me that we could see the real action only in 3-4 months, but it is possible that the old patterns will not repeat themselves as most expect.

The most convincing reason I heard is that it was caused largely of a decreasing inflation (and thus: interest rate) expectation in the US since the last Fed meeting. Basically I think it could have been contributed that stock markets are rallying worldwide, which is usually also a good sign for Bitcoin because it shows that people are willing to invest in riskiear assets.

I think also that the price didn't threaten again to fall under 60k significantly has also contributed. So there is more confidence in the current price level, and fear of another dump under the recent 56k lows are waning away.

I'm however not sure if this all is enough to get a new ATH soon. It could also consolidate again below the old ATH of 69k, but a bit higher (around 65-68k) for some time, but that would actually also be bullish in my opinion. A "quadruple top" in the 71-73k area due to a short and unsustainable spike would be more bearish.

I haven't found such a wide orderbook aggregator. Most go up to 75k approximately, like on Coinglass which goes up to around 78k for spot (it goes up to 100k for futures, but there are almost no orders in the 80-100k range). I think for more you'd need an API account directly on the exchanges. But as in the 75-78k area there are already relatively few coins for sale I think that currently that won't be that different for over 80k. I think people will post their orders in this region once we go a bit higher, e.g. over 70k again.

If we have to consider the market cap historical price of Bitcoin in 2024 in decision making to paragraph when good to sell, let us understand that every Investors would always want to sell at a higher market price.

So to me, if this May would not be able to beat the ATH @ $76K which we experienced before the halving, then I think we missed that good selling chance and selling on a cheaper price since the may could not surpass the ATH is not worth it.
So, let us just keep hodling.
I hope you also understand that regretting mood of resisting to sell at a promising price and then finally you sells below the price. So, while we are still in the month of May, let us see what good market price may come out of it.
Although, this discussion is for the short term investors because the long term Investors would always stay unpanick and unsentimental nomatter the nature of the market value.

I wonder if this pump is caused by the fact that we have had positive inflows into spot ETFs for four days in a row (and that hasn't happened in a long time), or if the market reacted to the news about the public announcement of all those US banks/companies that invested billions of $ in BTC through ETFs. Maybe it's a combination of both, but now the question is how long it will last.


I think the same way, because the closer we get to $100k, the harder it will be to keep the positions won if we assume that people will take profits on the way up. I don't know if it can be seen/verified, but are there sales walls that can show how much BTC is for sale in the $80k to $100k range at the moment?

Well, in my opinion, "sell in May" can be of interest to those people who are only investing in Bitcoin without actually making a decision about the price at which they want to sell. Since I started accumulating Bitcoin at an earlier price of $20k and I have made a decision to sell when the price gets above $80k, that means I don't have any concern to sell Bitcoin in the month of May, but someone who doesn't have any target price at which they want to sell can sell this month if they go by this old ancient trader myth. I am not in a rush to sell my coin, so I will hold on till I reach my target price, even if it doesn't happen this year. 

If someone getting used to trade with stocks or with forex then these movements would really be something that will shock you or will definitely be banging or punching up your monitor on the time that you have seen such movement but just like on what we are seeing on crypto space then these movements are really just that ordinary days in crypto. Speaking back on those sentiments like "Sell in May" and looking with those charts about monthly gains or loses in percentage then it would really be that hard to make out some patterns but obviously its not really that something bad to look up with these numbers
and you could really be able to make out some analysis basing up on what we are seeing. Usually prices will really be neither be affected with sudden sentiments or news or doesnt have any reason at all behind.
Sell or not for this month of May would really be just that depending on you because not all would really be getting in line on what those charts been saying. We've seen recently the price is shooting up
back again and this is what makes the situation even more harder to guess up.

I'd like to add a little comment based on the current market situation: If the pump which started yesterday (and today retroceded again a bit) takes us to an epic candle of 80000-90000 or more still in May, it may not be a bad idea to sell in May

I know FOMO will then set in again, but I'd would rather FOMO in the high 50s or low 60s because ... it could be actually the last time we see these prices, if everything happens similarly to previous bull markets. Until now there are also a lot of similarities to the January pump/dump, where we saw first an epic high of 49k and then retroceded more than 20% to 38k, then slowly and increasingly faster moving up again until finding a new halt in the low 50s.

Assuming the bull market continues, 80-90k could be a price level which we could revisit a couple of times, because of a very likely resistance near 100k.

But everything depends, in my opinion, on the actual market situation. For example, if in late May the 73k ATH was broken and then, contrary to expectations, a steady but relatively slow upmove started, then I would not sell. Because then the 100k could be broken quite soon.

For those experienced who know that Bitcoin is extremely volatile, a 10% or 30% drop in price in one day will not mean too much in the sense that they will panic about it, but there are so many weak hands in the market who cannot accept that they have lost 10% or more on their investment - although as long as they don't sell, they haven't actually lost anything.

As we can see yesterday and today, the market reacts to the news about all the companies that bought BTC through spot ETFs and whose data became public - which is a classic reaction of those who do not think for themselves but always make their decisions based on such news.

Lol, nobody lives in the southern hemisphere!! I do agree that May will be a good month, I have long said that all these falls could be recovered this month, while it doesn't look like that right now, it just takes a few days in a row ending in green and we can be over 70k again.

I mean going up 10% is not a huge deal in the crypto world, we could have that, also it means that we could have 10% days in a row, two of them and suddenly you are at over 70k once again. This is going to be quite important, we need to realize that it is not going to end up all that easy. This should be an important deal, we can't really make it work any other way, it will take some time but it will be important for everyone in the end.

og the op made thread yesterday and today we are whaling.

hodl hodl hodl.

When it comes to Bitcoin, I would focus more on the four year cycle. It’s backed by mathematics and has a proven track record. This year in particular with the halving, I don’t think it makes a lot of sense to be selling right now. You’ll regret it in a year. Stocks are more prone to an annual cycle of movements due to being more effected by the flow of money to the average person.

I can't say it is a good idea but optional IMO, it depends on the situation and needs. The situation keeps on changing and we can't say what happened in the past years will be the same as this year. So, we still need to keep updated and make some plans because why not sell our Bitcoin if there is an opportunity?
But in my mind, I keep holding on until early in the 4th quarter because it is noticed that its price rises when BER season comes.
However, I also think about the new ATH which I think this idea (Sell in May) is not good, not even this year until it reaches.

I'm not thinking about selling it anytime soon, especially in May. But that doesn't mean selling in May is bad for some short-term investors. I see May as a positive month for bitcoin rather than a negative one, so I'm not saying selling in May is bad (if one wants to do so). There are still many opportunities to buy in the following month, especially below the selling price in May, but investment decisions and plans should not change just because of another user's point of view even though they can see the price history in the table above.

There is fear and there is also greed, they must really be able to maintain their long-term investment plans well. Personally, I tend to hold on and hold longer for this year until the middle of next year, meaning I don't want to sell.

Price history can be a big help but still, its not ok to purely rely on this because there's still a factor to consider before you sell your holdings.
Either the market hits your target price or hit your cut loss level, that should be your basis of selling and also depend on your strategy. This data might be overwhelming but it can be good too if you know how to use it properly, but if you are just a beginner better to look at the price trend to help you decide on your next move.

Ohh, wow anyway from the historical view, most analysts consider may a negative month for the financial markets, but why I'm unable to evaluate, In the crypto market May smees like a kind of confusing month, even though the month is not closed yet but it will be surely a positive one, already market crossing 63k, but taking exit makes no sense in may especially when there's recent halving and a good journey is expected, I did add some more coins in the bag.

Best to grab it if you consider it cheap, for now, according to the expectations, the current price is really worth buying a few days or a week back it was the best entry time who were still waiting but seems like if they didn't take any action until now they are going to miss the train, because in my view it was the dead end of correction.

No, I think selling in May isn't a good idea in 2024, we are still in the early days of the bull run and who knows that happens in coming months. There's chance to see Bitcoin surging at new ATH levels in the coming months and the ones who sell now might end up missing some good returns that they might have when Bitcoin's price surges in the coming months.

I believe the ones who already accumulated Bitcoin should hold their coins for at least November 2024 but if the can then holding for 2025's November should be a good decision. If history repeats itself then we may have the highest intensity of Bitcoin in October-December. Most probably in October because if we check the History of last few years then we can see that October has given positive percentages as compare to other months.

So basically it's not a reliable thing for you to use as a tool to predict when you would be investing your money in bitcoin then. Now that I think about it, there's not a lot of significant happenings as of recently this month so maybe May does have it's years that it's good and then years that it's a meh. For me, I think that basing on the Coindesk provided graph, it's not a good idea to sell in May because the returns albeit at the level that's acceptable, it's not really that good for someone to do anyway.

This is until now the explanation I would myself find the most convincing one, just for its "internal logic" - because afaik it's a pretty common phenomenon that traders always try to "anticipate" the market.

However, judging from the data in the graph above, I think the evidence for it is relatively thin. If this was a widespread phenomenon, then we should see two things:

1) a "deepening" of the September "crash"
2) an increasingly negative August price evolution, due to traders anticipating the "Downtember"

At least the first one is not occurring. It seems to me even that the September downtrend is less pronounced each year. It's possible however that this "phenomenon" is now so well known that it is exploited by other traders, the other way around (e.g. trying to liquidate shorts).

For factor 2 (August becoming worse) there could be some evidence, in the last two years there was a double-digit August decline. So I don't rule out there is really some "anticipation" effect here in place.

Ah, thank you, I didn't know that the September Effect was really a thing in the stock market. Interesting.

It's interesting, I have also made observation on that matter, but for me there seem to be two different patterns:
- first, the "Monday/Tuesday dip" pattern. It isn't as common in the last weeks but was very pronounced in early 2024 (just after the ETF approval, some blamed GBTC selling)
- second, the "Monday boom - Midweek dip" which is now more common in the last weeks, and is similar to what you observed.
In both cases, however, weekends were quite stable and uneventful. I remember that in the early days of Bitcoin weekends were often an excuse for larger dips ("weekend dip" was a term you could google in 2013 or so).

A lot people really taking serious with anything they see on social medias, so I will not be surprised if this month Bitcoin price will decline especially during near end of the month. They believe Elon Musk's tweet make Bitcoin price rise, they believe when a business accept Bitcoin, the price will rise and any other silly thing. Right now Bitcoin price increased for 4%, this will be a good time for traders to sell their coins and bought on the beginning next month.

There are various theories, but they are still only theories without any solid evidence that the summer in the northern hemisphere causes people to be less active in trading, or that maybe these same people when they return from their vacations/travels sell some of their cryptocurrencies because they spent too much money on their vacation. To some extent, this could explain why September is mostly red, although perhaps a global survey could provide some kind of meaningful answer.

Perhaps some of the patterns could be the result of the fact that people are mostly guided by the herd philosophy, which means that when some traders go in one direction, the majority follow them - which again could mean that some experienced traders know how to use it to make a profit.

The crypto market is volatile, what is uptainable last year might not play out the same way in this year, example is ATH price that happened before the halving, it was a shift from the norm of previous halvings. I'd say that "sale in May" might not be a profitable decision because we're still in market dip after the halving, Bitcoin price has been hovering between $58k and $64k, and presently it's over $62, seeing that bull run has not really started in full force, I'll rather buy now than sale.

Volume is not the only thing that moves prices when volume is low or close to constant other factors starts gaining prominence like a lot not excluding  news,Market sentiment etc.
The market is already used to the September effect and many would want to close their position before September.

Yeah which is similar to the "sell in May and go away" which sprangs through summer
But the vacation theory is not the only reason people believe Bitcoin fall during September like bad news are believed to be released during Septembers
Schools usually start during this periods and let's not forget the financial crisis occurred in September
Maybe this has played a role but still the September effect has been going on way before the 2000's.

Nice data, despite historically proven correct on an average shouldn't be a basis for taking decision
I believe they can help though.
Like I personally observed patterns like this in days with Bitcoin.
Monday positive, Tuesday -wednessday evening negative, Wednessday night -friday positive, Saturday -unstable, Sunday -negative till night, and Sunday night till Monday positive.
This is based on my region time could be different from other country.
 

I dunno, when talking about bitcoin/crypto, there are simply too many factors to take into account(especially in the current economic/regulatory environment) to make a conclusion just based on traders/investors going on some summer break.

Personally, I wouldn't make any decent-sized market decisions based solely on monthly history price data. Cool data though, nonetheless.

So many myths live in the world today and are still thriving, which includes so many assumptions in the financial market as well, just like this one. But in my almost 2 decades of experience, they are mere lies, they will never be true but were put together to become myths due to mere coincidence at times. However in reality, the market is dynamic, it will never do the same thing at a specific period unless there are coincidences where histories repeat themselves or the market just behaves almost similarly to what had happened before.

Come what may, every trader should leave at the moment and not in the past to avoid serious trading issues. What any trader/investor should trust only is their trading charts, this is the best way to guide us. I will always say that there is nothing that can be compared to the trading chart because no matter what happens in the market, the trading chart will pick it unless the person doesn't know how to use it well.

They should sell it at a high price and not depend on the month. We don't know whether the price will increase significantly in May or whether it will continue to experience correction. If the price can really increase in May, they can sell it. But if not, they should not sell it and keep holding it. We can't predict market conditions, so we must know market conditions before deciding to sell. These data may not always be true because market conditions are always changing.

Ah yes, the "vacation theory". I should have mentioned it explicitly in the OP.

But there's one thing I don't understand: If there are less traders, then the order books should be normally less thick. This should make it easier both for bears and bulls to try to break through resistances and supports to trigger liquidations, and actually rise volatility.

It's also not a good explanation for a negative tendency: "less traders" doesn't necessary mean "less bulls". I would even argue that professional traders mostly use strategies which don't depend that much on bearish or bullish movements. I've read also the explanation "traders take profits before they go to vacation", but this would mean normally that June/July should be relatively negative, and not August/September like Bitcoin price evoluton until now suggests.

For me it's interesting to analyze why just September is so negative for the Bitcoin price, because in September those going to vacations in the Northern Hemisphere are mostly back, if the "vacation theory" is the explanation for the "sideways August". This would mean they come back ... and sell? (The good ol' "Sell in May" myth says something different ).

That term generally applies to stocks and last time I checked it’s 50/50 whether it’s correct or not.

One thing that is true is that there is less growth because many people just go on vacation instead of trading. There is less liquidity and less movement and what happens is that stocks usually just trade sideways like bitcoin does in August like in your graph.

August was always a horrible month for crypto and bad for stocks. Barely anyone is trading because most of those professionals take that month to go on vacation.

Often one reads the ancient trader myth "Sell in May and go away!" in a Bitcoin or crypto context. And there seems to be, at a first glance, some evidence that the "boreal" summer (in the Northern Hemisphere) has, on average, a lower ROI than the rest of the year. For example, according to this recent Coindesk article, June, July, August and September since 2010 have had below-average returns, and August and September even had a net price decline of -1% and -4.6%.

But let's look a bit closer what happened in each year:


Source: Newhedge

We can see the following:

- May is a quite average month, but quite positive. 8 times the month left positive returns (not counting the current May), and 5 times negative returns.
- June is also, surprisingly, more positive than negative. 7 times there were positive returns, and only 5 times the price fell.
- July, again, has 8 positive months and 5 negative. The interesting thing here is that it is a particularly low risk month: Only once, in 2011, there was a double-digit decline in price, and it was of only 12%.
- August finally follows the stereotype of the "boring" summer month. 10 times the returns were negative, and only 4 times positive. But: Only in 2011 there was really a crash with 30% loss, while in 2017 there was a 73% growth.
- September also looks often like a typical "Downtember".  Like in August we have 4 positive and 10 negative months. But there is some hopium even there: the negative months, with the exception of 2011 and 2014, weren't that bad.

So we could conclude from this picture that following this rule strictly would make us lose at least three net positive months. Perhaps we should change it to "Sell in July". And even in this case traders may risk to lose particularly good months like August 2013 or 2017.

On the other hand we can see that in years where the start of the year (January to March) was bullish, there was often a bearish period starting in April, May or June. Particularly the years 2021 and 2022 show this pattern. The "Don't sell in May" fraction of course can argue that both in 2021 (the China mining ban) and in 2022 (the Terra/Luna crash) there were external factors which had an influence on the bearish development.

So what do you think? Is "Sell in May" a good idea in 2024?