Bitcoin traders find themselves on edge as the calendar flips to May, eyeing the potential for a downturn in line with the age-old market adage, “Sell in May and go away.” This saying, originating from the traditional financial sphere, has long suggested that investors should exit their positions at the beginning of May and re-enter around November, due to historically weaker market performance during the summer months. The digital currency market, which has matured significantly over the past few years, seems to be increasingly swayed by similar seasonal trends.
Historical Context and Current Sentiment
Bitcoin’s recent breakout has traders optimistic about reaching the $100,000 mark, yet caution prevails as they grapple with the specter of May’s notorious seasonality. “Historically, the next couple of months have been weak for financial markets,” remarks Jeff Mei, COO at BTSE. He notes that although markets have underperformed recently, this year might defy expectations, with Bitcoin potentially hitting $97,000 as growth stocks recover. However, he warns that the recent weak GDP figures from the U.S. could pose risks, especially if negative growth persists, signaling a possible recession.
The phrase “Sell in May and go away” traces back to the early days of the London Stock Exchange, originally referencing a mid-September horse race. It has since become a rule-of-thumb for some investors, based on the belief that equity markets typically underperform during the summer due to reduced trading volumes and institutional inactivity. Historically, U.S. stock markets have shown weaker performance from May through October compared to the more robust period from November through April.
Bitcoin’s Seasonal Patterns
Bitcoin, too, exhibits recurring seasonal patterns, often shaped by macroeconomic cycles, institutional investment flows, and retail investor sentiment. Data from CoinGlass reveals that Bitcoin’s performance in May has been negative or subdued in recent years. In 2021, the cryptocurrency plummeted by 35%, marking one of its worst months that year. The following year saw a 15% decline in May, exacerbated by the collapse of the Luna cryptocurrency. In 2023, Bitcoin’s May performance was relatively flat, suggesting muted volatility.
This pattern of red May months often precedes further declines in June. Over the past five years, four Junes have ended in negative territory. While these patterns don’t guarantee future outcomes, they suggest that as more institutional capital flows into the crypto market, it may react more like traditional equities to macroeconomic and seasonal sentiments.
Caution in the Air
Traders are urged to exercise caution, particularly after strong rallies in the first quarter. Altcoins, especially those driven by recent speculative and hype-fueled rallies, could be prone to significant pullbacks. Vugar Usi Zade, COO at crypto exchange Bitget, highlights that since 1950, the S&P 500 has averaged a modest gain of 1.8% from May through October, with positive returns in about 65% of those periods. This performance is notably weaker than the stronger gains typically seen from November through April.
For Bitcoin, the average return for the second quarter (April-June) over the past 12 years has been 26%, with a median of only 7.5%. This indicates the presence of outlier-driven performance and recurring volatility. By the third quarter (July-September), the average return drops to 6%, with the median turning slightly negative, suggesting a pattern of post-Q2 fatigue or consolidation.
“This seasonality overlap suggests caution heading into May,” Zade comments. He notes that historically, the fourth quarter has been Bitcoin’s strongest period, with an average return of +85.4% and a median of +52.3%, whereas the third quarter tends to yield more muted or negative results.
As traders navigate the uncertain waters of May, the perennial wisdom of “Sell in May and go away” could become a self-fulfilling prophecy if technical indicators falter and market sentiment shifts. While Wall Street calendars may not dictate crypto markets, the psychological impact of such narratives remains potent, leaving traders to ponder whether this year will follow tradition or chart a new course.
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This article is based on: Bitcoin Traders Brace for ‘Sell in May and Go Away’ as Seasonality Favors Bears
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
