“Back to the Future” was a blockbuster hit in the 1980s. It featured a car that could travel through time and a young protagonist named Marty Mcfly, played by actor Michael J. Fox. Marty got his hands on an almanac from 2015 and used it to win big on future bets. Wouldn’t you like to have such a tool for trading? Imagine knowing the price of bitcoin in advance. However, since we don’t have a time machine, we can rely on historical data to increase our chances of success. Let’s take a look at some theories from popular crypto analyst Benjamin Cowen.
Bitcoin monthly return chart
Benjamin Cowen presents us with a table that shows the months in which the value of Bitcoin (BTC) increased or decreased month by month. The table clearly shows that the months of August and September are, on average, the worst months for the top crypto asset.
In a YouTube video, he explained the chart, explaining that in the 2011 and 2019 Bitcoin halving years, “five of the first six months were green and five of the last six months were red.” In 2015, he stated that four of the first six months were red and five of the last six months were green.
If we average Bitcoin’s August returns in the pre-halving years of 2015 and 2019, we would have an 11-12% drop. Cowen ruled out 2011 because of the wide deviation.
He attributes the correction during this period to stock market seasonality, suggesting that Bitcoin is correlated with stock market performance. He also pointed out that altcoin projects are being washed out during this time, which is not a bad thing as it washes out tokens with no use.
Let’s look at the charts
Cowen has provided us with a very compelling argument based on Bitcoin’s past price action. But what does the table say? Is there any agreement that supports his thesis? Let’s look at the table below. It is a simple monthly BTC chart that shows horizontal support in white, a Fibonacci retracement indicator and a percentage indicator.
According to Benjamin, Bitcoin is down about 11-12% in August of the last two years leading up to the halving. The chart below shows us that a 12% retracement would take us to $25,000. This level is also supported by two previous weekly swing highs. The Fib value of 0.382 also reinforces this value. All this agrees surprisingly!
When to Buy and Sell Bitcoin?
The question of when to buy and sell a crypto asset is probably the most popular question among investors. Unfortunately, no one has a time machine, so there is no definitive answer.
Historically, August and September appear to be the worst-performing months for the king of digital assets. Some investors would likely panic and sell if they saw red candles. However, some see it as an opportunity to shop at lower prices. Investing isn’t just about throwing money into an asset and praying for the best. Rather, it is a matter of analyzing all available data and making an educated guess.
Watch Benjamin Cowen’s video:
The information provided is for informational purposes only and does not constitute financial advice
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