Summer Slosh and Crypto Policy Updates

If you’ve been investing for any sort of time you’ve probably heard one of my most favorite sayings.

“Sell in May and go away.”

This popular Wall Street saying essentially warns listeners to take profits in the spring and step away from markets in the summertime. Of course, investors then buy back in the fall. The reason being that many Wall Street investors spend their summer at the beach doing summer activities away from their computer screens. Therefore there’s less action in the markets and less liquidity. That tends to lead to volatility, and not the good kind.

I’ve seen this play out time and time again in crypto markets and only recently did it finally click with me. Crypto prices just always tend to chop in the summertime and rallies have a tough time building momentum. Investors just simply have better, more fun things to do in the summertime than stare at charts.

Now, this recent dip started in mid-March and the market has been chopping ever since. It looks like the sideways summer may have started early, and I have my theory on why that is. The big difference this year was that we had the halving in April. Every four years there is a dip in crypto prices around the time of the Bitcoin (BTC) halving and this year was no different. I believe the halving may have kicked off the summer chop a few months earlier than usual (see video).

Opportunities Abound

However, that does lead to opportunities for those investors with longer term mentalities and some patience. While it’s still a little too early to tell if the recent low on May 1 is the bottom of this dip, it’s not too early to say that there have already been great buying opportunities on many cryptocurrencies. We’ve seen 40% – 50%+ discounts on many top altcoins already, and even if the bottom isn’t in yet, those are great prices to buy some of this cycle’s top cryptocurrencies.

Taking a look at Bitcoin’s chart you can see the recent dip and the ensuing sideways price action. BTC is currently sitting on support in the form of its 100-day moving average. It’s too early to say whether or not Bitcoin’s bottom is in, but we can see a new sideways channel forming. It appears as though Bitcoin may trade between $58,000 and the high of $73,000 for the next few months.

I do expect a big breakout across the board sometime later this summer, perhaps early fall. That gives us a few months to find the coins we want to buy ahead of the next big run up in prices. This is the time to find your conviction plays for the coming bull run.

On a side note, there has been some very good news for some crypto holders. There are multiple reports that those who lost their money in the collapse of the FTX exchange could be set to recover more than 100% of their money. Of course that is due in part to the run up in crypto prices but also the recovery of many user assets. That could lead to some sidelined investors jumping back into the market.

Crypto and Politics

There have also been some interesting updates on the political front for crypto this week.

President Biden plans to veto legislation allowing financial firms to custody cryptocurrency for clients. That could throw a wrench in the recent Wall Street adoption of cryptocurrency in the United States. It has become clear that the current administration is firmly against cryptocurrency right now. Specifically when it comes to self-custody, one of the most important features of crypto. The ability to hold and operates one’s wealth is one of the biggest draws to this asset class and is something crypto pioneers will fight for.

On the flip side, former President Trump has now come out as firmly pro-crypto after an event held at Mar-a-Lago. Trump has vowed to help keep crypto companies in the U.S. by ending the recent regulatory hostility towards this asset class. After four years of a hostile stance from the current administration towards crypto, we could be on the verge of friendly regulation.

November could very well determine the fate of crypto in the U.S. and heavily influence this bull run. Should Trump win and bring about friendlier regulation to the space and an effort to keep crypto jobs in America, investors could become even more bullish. It’s safe to say that November will be pivotal for the crypto market.

Editor’s Note: Crypto is making ordinary investors rich and it also serves as an inflation hedge. But you need to make your move now, before the next leg-up in the crypto bull market of 2024. Every day you wait is literally costing you thousands in profits.

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