The cryptocurrency market had a negative performance in May, fueling the “Sell in May and Go Away” mantra.
“Sell in May and Go Away” is a well-known phrase within the business and finance sector, which proposes an investment strategy for both stocks and cryptocurrencies.
What is the ‘Sell in May and Go Away’ Strategy
This strategy suggests selling stocks at the start of May or in late spring and keeping the proceeds in cash until November or late autumn, when investors would reinvest in the stock market.
The underlying idea is to steer clear of holding stocks during summer, as historical trends indicate that the stock market tends to underperform between May and October.
In this article, the performance of the crypto market cap in May will be analyzed in order to determine if the mantra proved true in 2023.
Crypto Market Cap (TOTALCAP) Decreases Slightly
The TOTALCAP posted a negative performance in May, albeit at an almost negligible rate. Measuring from May 1, TOTALCAP fell by 5.50%.
While the May lows were a full 9% below the May 1 opening price, TOTALCAP regained its footing and has increased sharply over the past week.
Currently, it is attempting to move above the resistance line of a descending parallel channel. Since the descending parallel channel is considered a bullish pattern, a breakout from it is expected.
If the price breaks out, it will likely move above the $1.17 trillion resistance and increase to $1.30 trillion.
On the other hand, another rejection from the line will likely take TOTALCAP back down to the channel’s support line at $1 trillion.
Altcoin Market Cap (TOTAL2) Performance in May
At first glance, the technical analysis from the daily time frame shows that TOTAL2 has outperformed TOTALCAP in May since the former has only fallen by 4%.
However, the main reason for this is that the preceding decrease is much larger. Additionally, TOTAL2 is trading close to the support line of an ascending parallel channel. Since the channel is considered a bearish pattern, a breakdown from it is likely.
If that occurs, TOTAL2 could fall to the next closest support area at $500 billion.
However, if the bounce continues, TOTAL2 can reach the closest resistance at $610 billion. If it clears it, an upward movement to $700 billion will be the most likely scenario. This would in turn confirm that the trend is bullish.
Bitcoin (BTC) Had the Worst Performance in May
The Bitcoin price had the worst performance of the three, falling by 7.50%. This can also be derived by the fact that the total crypto market decreased more than the altcoin market.
However, despite this drop, the BTC price also trades very close to the resistance line of a descending parallel channel. It reached this level after a sharp bounce that validated the $26,800 horizontal support area and saved a potential breakdown. This is considered a bullish sign.
If the price breaks out, it will confirm that the correction is complete and likely initiate an upward movement to $30,000.
However, due to the ongoing decrease, it is possible that the BTC price will break down below $26,800. In that case, a fall to the channel’s support line at $24,400 will be expected.
For BeInCrypto’s latest crypto market analysis, click here.
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.