Sell in May & go away...
Over the past 5 years:
- Buying BTC in October & selling in April had 1,449% cumulative returns.
- However, buying in May & selling in September had -29%
Will we see the same this year? Let's dig in 👇
Over the past 5 years:
- Buying BTC in October & selling in April had 1,449% cumulative returns.
- However, buying in May & selling in September had -29%
Will we see the same this year? Let's dig in 👇
"Sell in May, Go Away" is an old adage from TradFi which generally refers to the effect of seasonality.
It's statistically significant and studies have been done that have shown as much.
I talked about it in a recent vid
It's statistically significant and studies have been done that have shown as much.
I talked about it in a recent vid
However, according to a report by K33 research, the effect is just as strong in the crypto markets.
The below chart shows the cumulative return if you had followed that strategy.
It's quite stark
The below chart shows the cumulative return if you had followed that strategy.
It's quite stark
We have started this May with sentiment cooling considerably.
For one, there have been steady ETF outflows in the US. The past 5 days have seen net outflows of $632m.
The HK ETF flows have also been much lower than predicted.
For one, there have been steady ETF outflows in the US. The past 5 days have seen net outflows of $632m.
The HK ETF flows have also been much lower than predicted.
Daily trading volume & volatility has fallen to 2 month lows and futures premiums have fallen to 3 month lows.
Perps funding rates have cooled substantially, & CME futures OI held by non ETF funds is at the lowest since Oct 2023.
Institutions are less bullish.
Perps funding rates have cooled substantially, & CME futures OI held by non ETF funds is at the lowest since Oct 2023.
Institutions are less bullish.
Retail sentiment is also waning.
The Bitcoin Fear & Greed index is in neutral territory, "Bitcoin" search trends are heading lower & I am sure your Twitter TL is full of doom posting.
So, it's safe to say May has not got off to a good start.
The Bitcoin Fear & Greed index is in neutral territory, "Bitcoin" search trends are heading lower & I am sure your Twitter TL is full of doom posting.
So, it's safe to say May has not got off to a good start.
Will the bleed continue?
Well, a lot of what has been driving this is the worsening Macro.
The pivot play has also left in May and appears far away.
This is driving liquidity away from the markets in general.
Well, a lot of what has been driving this is the worsening Macro.
The pivot play has also left in May and appears far away.
This is driving liquidity away from the markets in general.
https://twitter.com/nicrypto/status/1783527308877304250
We need more liquidity!
A saving grace could be the draining of the Treasury's General Account. This could provide risk assets the liquidity injection of up to $1.4trn.
This was most recently theorised by Arthur Hayes last week.
A saving grace could be the draining of the Treasury's General Account. This could provide risk assets the liquidity injection of up to $1.4trn.
This was most recently theorised by Arthur Hayes last week.
https://twitter.com/CryptoHayes/status/1783701769371185274
Whether Yellen & Co decide to provide this much needed stimulus depends on many factors.
Will the labour market worsen? Will GDP growth continue to slow?
How badly does the administration want to win the election?
Will the labour market worsen? Will GDP growth continue to slow?
How badly does the administration want to win the election?
I'm inclined to think that the Treasury will be forced to act.
Of course, a lot will also depend on what Powell says in the FOMC today.
So, even though many have sold in May, they may not stay away all the way to November.
NFA & all that 🫡
Of course, a lot will also depend on what Powell says in the FOMC today.
So, even though many have sold in May, they may not stay away all the way to November.
NFA & all that 🫡
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