Bitcoin’s $100K Target May be Short-Lived as BTC Traders Brace for ‘Sell in May’

A bitcoin (BTC) breakout earlier this week has merchants eyeing the $100,000 stage in the approaching days, a euphoric commerce that might be short-lived as May’s seasonality approaches.

“Historically, the next couple of months have been weak for financial markets, with many investors abiding by the Sell in May and Walk Away adage,” Jeff Mei, COO at BTSE, informed CoinDesk in a Telegram message.

“That being said, markets have significantly underperformed over the last few months, but this year could buck the trend, with Bitcoin hitting $97K and other growth stocks coming back over the last few weeks. This past week’s weak GDP numbers coming out of the US indicate some risk, as another report of negative GDP growth next quarter would indicate a recession, but rate cuts could lead to a rebound as well,” Mei added.

The adage “Sell in May and go away” is a long-standing seasonal saying in conventional monetary markets.

It means that traders ought to promote their holdings at the start of May and return to the market round November, primarily based on the idea that fairness markets underperform throughout the summer season as a consequence of decrease buying and selling volumes, lowered institutional exercise, and historic returns information.

The phrase dates again to the early days of London Stock Exchange and was initially “Sell in May and go away, come back on St. Leger’s Day,” referencing a mid-September horse race.

What information exhibits

Historically, U.S. inventory markets have proven weaker efficiency from May by means of October than from November by means of April, resulting in the technique changing into a seasonal rule-of-thumb for some traders.

Bitcoin additionally exhibits recurring seasonal patterns, typically influenced by macro cycles, institutional flows, and retail sentiment. CoinGlass information present the asset’s May efficiency has been unfavorable or muted lately.

In 2021, BTC dropped 35%, considered one of its worst months that yr. In 2022, May was once more unfavorable, with a 15% drop amid Luna’s collapse. In 2023, BTC was flat to mildly constructive, reflecting muted volatility.BTC popped up 11% final May and ended May 2019 up 52% — a standout efficiency from all months following 2018, when crypto markets are typically thought to have matured after that yr’s altcoin cycle.

Red May months are adopted by extra declines in June, the info exhibits, with 4 of the previous 5 June months ending in purple.

These patterns don’t assure future efficiency, they counsel that crypto markets might be more and more reacting to the identical macro and seasonal sentiment as equities, particularly as extra institutional capital enters the house.

Sign of warning?

Traders might develop cautious primarily based on historic value seasonality and fading momentum after robust Q1 rallies. Altcoins, particularly meme cash, might be notably susceptible to pullbacks, given their current hype-driven rallies and speculative flows.

“Since 1950, the S&P 500 has delivered an average gain of just 1.8% from May through October, with positive returns in about 65% of those six-month periods—well below the stronger performance seen from November through April,” Vugar Usi Zade, COO at crypto alternate Bitget, informed CoinDesk in a Telegram message.

Over the previous 12 years, common Q2 returns (April–June) for BTC have stood at 26%, however with a median of solely 7.5% — an indication of outlier-driven efficiency and recurring volatility.

By Q3 (July–September), the common return drops to six%, and the median turns barely unfavorable, suggesting a sample of post-Q2 fatigue or consolidation, Zade added, citing information.

“This seasonality overlap suggests caution heading into May. Historically, Q4 marks Bitcoin’s strongest seasonal period, with an average return of +85.4% and a median of +52.3%, whereas Q3 tends to deliver more muted or negative outcomes,” Zade stated.

In brief, whereas Wall Street calendars don’t bind crypto, market psychology nonetheless responds to narratives, and “Sell in May” might grow to be a self-fulfilling prophecy — particularly if technicals begin to crack and sentiment flips.