Buy before the 15th and sell during the next two weeks?
Is it a coincidence or just logical?
Many people get their salary during the last two weeks of the month.
Could it be the case that a lot of people run low on fiat money just before they get paid again and sell crypto coins? Prices drop.
Others - or perhaps even the same people - buy crypto coins after receiving their salary? Prices rise.
Here an example of the Litecoin development over the last 90 days:
You can see that the days just before the 15th LTC was relatively low and went up the days after that date.
What do you think about this theory?
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I don't see a way right now to backtest that idea on the cryptomarket, no program, no data feed.
But there is research on that topic on the normal stock market:
https://link.springer.com/article/10.1007/BF02920113
http://www1.cbn.com/finance/best-days-month-invest
From the cbn article:
Also:
Based on that, I would say there could be a small effect to the extent on the prices of cryptocurrencies, but not a significant one. The internationality of the cryptocurrency market with everyone having different days on receiving the salary, should average it out.
Maybe the market in the US is producing the mentioned small monthly pattern on some coins, which are popular in the US, but not all of them.
But the whole cryptocurrency market is still missing the major volume coming from funds and programs like 401ks. So only payments like the salary or anything that goes to the people interested in cryptocurrency could yield an effect.
The overall trend, with bitcoin leading it, should still be the major contributor to the whole scenario.
So I wouldn't trust the seasonal effect at the end of the month in this market condition.
Thanks so much for your comprehensive answer and research @takowi!
Very much appreciated.
I think you're right with what you said. Especially the fact that it's a global market should average it indeed.
I did nothing really. 😉
interesting analysis, friend. I agree with almost everything.
its an interesting patter that you see, thank you!
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