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 a 2015 Almanac and used it to win big on future bets. Wouldn’t you love to have such a tool for trading? Imagine knowing the price of Bitcoin ahead of time. But since we don’t have a time machine, we can rely on historical data to increase our odds of success. Let us look at some theories presented by popular crypto analyst Benjamin Cowen.
The Bitcoin Monthly Returns Table
Benjamin Cowen presents us with a table that shows the months when Bitcoin (BTC) increased or decreased in value on a month-to-month basis. The table clearly shows that on average, the months of August and September is the worst month for the top crypto asset.
In a YouTube video, he expounded on the table and explained that during the Bitcoin pre-halving years of 2011 and 2019, “five of the first six months were green and five of the last six months were red”. In 2015, he explained that four of the first six months were red, and five of the last six months were green.
If we average the returns of Bitcoin in August of the pre-halving years of 2015 and 2019, we would have a drawdown of 11-12%. Cowen excluded 2011 because of the big variance.
He attributes the correction during this period to the seasonality of the stock market, which indicates that Bitcoin correlates with how the stock market moves. He also noted that altcoin projects wash out during this time, which is not a bad thing since it washes out tokens without any utility.
Let us look at the Charts
Cowen gave us a very convincing argument based on Bitcoin’s past price actions. But what does the chart say? Is there any confluence to support his thesis? Let us look at the chart 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 has retraced around 11-12% in August of the last two pre-halving years. The chart below shows us that a retracement of 12% would bring us to the $25,000 level. This level is also supported by two previous weekly swing highs. The 0.382 Fib level is also reinforcing this level. All these surprisingly align!
When to Buy and Sell Bitcoin?
The question of when to buy and sell any crypto asset is probably the most popular question among investors. Unfortunately, nobody has a time machine so there is no definite answer to this.
Historically speaking, August and September seem to be the worst-performing months for the king of digital assets. Some investors would probably panic and sell upon seeing red candles. However, some see this as an opportunity to buy at lower prices. Investing is not just about throwing money at an asset and praying for the best. Rather, it is about analyzing all available data and making an educated guess.
Watch Benjamin Cowen’s Video:
The information provided is for informational purposes only and is not intended as financial advice
