Are you an avid Bitcoin trader? If so, you are probably familiar with Bitcoin price charts, trends and historical price points.
Bitcoin has been gaining steadily ever since it recrossed $13K - the highest price it has seen since July 2019.
Is it pure coincidence that around the same time last year, Bitcoin saw its third-largest single day gain in history?
There's a theory that might account for this phenomenon, known as The Halloween Effect.
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What is the Halloween Effect and Will It Affect Bitcoin’s Price in 2020?
Despite its name, the Halloween Effect has nothing to do with the supernatural.
So how did this term come about?
The Halloween Effect's origins were from the stock market, as higher stock returns were observed from November through April compared to the rest of the year.
While the theory has its fair share of naysayers, market data suggests that the Halloween Effect is pretty legit - not only for the stock market, but for Bitcoin as well!
When the bear market ended in 2015, the months between October 31 and May sparked off the bull run crypto investors needed, resulting in about 41% gains for users who invested in the cryptocurrency.
Bitcoin also set its famous all-time-high at $20,000 between October 2017 and May 2018.
“Sell in May and go Away”
Some traders go by the well-known adage “Sell in May and Go Away” which suggests that traders should exit the market in May and re-enter in November.
This theory is believed to have originated from the UK, where the privileged class would leave London for their vacation houses in the summer, neglecting their investment portfolios until they returned back to the city in September.
Will The Halloween Effect Spike BTC prices in 2020?
Bitcoin is a highly volatile asset. Coupled with the equally unpredictable nature of 2020, we cannot predict whether prices will follow the Halloween uptrend this year. That said, it has been a very exciting year for crypto so it's worth keeping your eyes on key price movements.
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All opinions expressed here by Coinhako.com are intended for educational purposes, taken from the research and experiences of the writers of the platform, and should not be taken as investment or financial advice.