Markets
EXCLUSIVE: Will cryptobulls return in the fall? Experts explain why summers are not the best for Bitcoin, Ethereum and other coins
“Sell in May and leave.” This age-old Wall Street adage, in addition to the stock market, is also increasingly applicable to cryptocurrencies.
From June to August, market growth and transaction volumes still followed a downward trend across the industry.
Last year, total spot and derivatives trading volumes during the summer months fell 18% compared to the spring. Conversely, volumes increased by almost 10% the following fall, according to to digital asset data provider CCData.
Additionally, total market capitalization declined by 4% during this phase last year, only to increase by 52% over the next four months, a stark contrast.
Benzinga spoke with experts to demystify the “summer slump,” as many in the market call it.
Summers: the not-so-exciting time for cryptocurrencies
Ryan Grace, Head of decentralized trading platform tastycrypto, said that most retail traders and institutions are reducing their business operations due to the festive season.
Indeed, summer is the peak time for travel in the United States, and we see people enjoying water activities and relaxing at the beach.
“This often creates an environment of lower volatility,” Grace noted. He added that selling options could be a good strategy in a neutral market, but reminded that a market with low liquidity can quickly experience wild swings.
Markus Kraus, The Europe Affiliate Manager of Trive Financial Services, while referring to the aforementioned factor, also attributed the dull phase to the lack of important events such as cryptocurrency conferences and meetings with regulators that could move the markets .
Chris KlineCOO and co-founder of BitcoinIRA, mentioned that the phase tends to peak Bitcoin The accumulation of BTC/USD due to moderate prices, provides a great chance for bullish traders to capture the asset ahead of a possible rate cut by the Federal Reserve later in the year.
What to expect during the fall and winter months?
Grace considered fall “one of the best times” to trade cryptocurrencies due to the injection of new liquidity from investors returning from vacation.
“Historical data shows considerable movement in Bitcoin prices during the fall compared to the summer, although the direction varies. This trend often continues into the winter months, driven by renewed confidence in the market and end-of-year positioning,” Grace emphasized.
Echoing this sentiment, Kline predicted a return of bullish momentum in the latter phase of the year.
With prediction markets anticipate a 70% chance of two or more rate cuts by the end of the yearBased on decreasing inflation and the upcoming election, Kline hoped that cryptocurrencies, along with other major assets, would see a northward move during the fall and winter months. .
At the time of writing, the total cryptocurrency market cap was worth $2.39 trillion, while Bitcoin was trading at $65,556.36, according to data from Benzinga Pro.
Photo by FellowNeko on Shutterstock
These ideas pave the way for more in-depth discussions at the next Benzinga conference. The future of digital assets event on November 19.