What Is the Best Time in A Year to Buy Bitcoin?
Investors should purchase bitcoin in the first quarter of a year and better to cash out it at a proper time in the second quarter to maximize their trading profits, suggests FeiXiaoHao, the biggest cryptocurrency information site in China.
According to its observations based on the market performance in the last two years since 2018, the firm found out that there seems to be a similar “January Effect” in the bitcoin market.
The January Effect is a hypothesis that there is a seasonal tendency in the stock market where securities’ prices increase in the month of January more than in any other month. The calendar effect would create an opportunity for investors to buy stocks for lower prices before January and sell them after their value increases.
Similarly, such a calendar effect is also observed in the bitcoin market, which is supposed to come in February, according to FeiXiaoHao.
Based on the past price actions, the analysis points out that February, or a wider time range of the first quarter is the best time in a year to buy BTC. The reason behind this statement is that prices tend to be at its lowest in those days.
That means, for Chinese crypto traders, the Spring Festival, usually fall in February, is a good time to buy the dip. When the market rallies back in the new year, then sell it at an optimal time when the profits meet their expectations.
But it should be noted that the study does not suggest to buy blindly in February. Investors need to use some technical means to find the lows to buy in. For most investors who are not bitcoin financial specialists, a wise strategy would be a regular purchase scheme at price lows in the first quarter.
The theory suggests people buy BTC in the first quarter of a year, and execute orders as soon as the second quarter begins. It recommends not to hold till the third quarter, as there’s a high possibility the market will turn down in the second half of the year.
The seasonal tendency could also be reflected by the trading volume. In the scenario, when the BTC prices are at lows, and volumes are also lower in those days, it would be a good time to increase bitcoin stash.
The analysis concludes that the bitcoin-dominated crypto market will see less volatility and seasonal capital inflows and outflows will be more influential, which would shift from a niche market to one that is maturing.