Bitcoin: Seasonal Summer Weakness

When I heard about Bitcoin for the very first time in May of 2011, it traded at eight US dollars. As I write this, almost exactly eight years later on May 21 2019, it is trading at about USD 7,950.

If I had invested USD 1,000 when I first became aware of it, I would have made a profit of almost USD 1,000,000 in eight years – the kind of return one can normally only dream of!

Bitcoin Exhibits a Pronounced Phase of Weakness in the Summer

In view of such staggering gains, many investors are probably wondering whether they should sell their Bitcoin. Let us take a look at what the seasonal statistics have to say about that.

The chart below depicts the average price pattern of Bitcoin over the course of a year. The horizontal axis denotes the time of the year, the vertical axis the level of the seasonal index (i.e., the average value of Bitcoin indexed to 100 at the beginning of the year).

Bitcoin, seasonal price pattern over the past 7 years

From June 6 onward, a seasonal weakness commences. Source:

As you can see, the price of Bitcoin does tend to fall prey to the summer doldrums: in the period highlighted in dark blue from June 6 to October 8, it enters a pronounced seasonal downtrend.

Optimal Seasonal Time Periods in Bitcoin

The average price loss between June 6 and October 8 over the past seven years was 4.29 percent. That is equivalent to a – for Bitcoin – relatively high loss of 13.09 percent annualized. Just how weak this phase is, becomes even more obvious if one compares it to the seasonally strong time period: Bitcoin, on average, rose annually by a stunning 331.88 percent!

From a Seasonal Perspective, it is Soon Time to Sell

In the weak seasonal period highlighted above, the loss reached up to 63.39 percent – in short, the risk is quite substantial. Thus, from a seasonal perspective, it is now time to sell Bitcoin. Performance in the summer months was to date particularly poor relative to the rest of the year, during which Bitcoin, on average, delivered extremely strong performance.

If you are interested in benefiting from seasonal statistics, you can find more details about the season- ality of bitcoin or other crypto currencies and many other instruments at or with the help of your Seasonax app in the Bloomberg or Thomson Reuters Eikon terminals.