Bitcoin experienced a breakout earlier this week, causing traders to set their sights on the $100,000 level in the coming days. However, this euphoric trade may be short-lived as May’s seasonality approaches.

Jeff Mei, COO at BTSE, mentioned that historically, the next few months have been weak for financial markets, with many investors following the “Sell in May and Walk Away” adage. Despite this trend, Mei noted that Bitcoin has been performing well, reaching $97K and other growth stocks making a comeback in recent weeks. While weak GDP numbers from the US may pose some risk, Mei mentioned that rate cuts could potentially lead to a rebound.

The “Sell in May and go away” saying is a common seasonal strategy in traditional financial markets. It suggests that investors should sell their holdings at the start of May and return around November to capitalize on underperforming summer markets.

Historically, US stock markets have shown weaker performance from May through October compared to November through April. This trend has become a rule-of-thumb for some investors. Bitcoin also shows recurring seasonal patterns, influenced by macro cycles, institutional flows, and retail sentiment.

While past performance doesn’t guarantee future outcomes, data shows that May months with negative returns for Bitcoin are often followed by more declines in June. This suggests that crypto markets may react to macro and seasonal sentiment similar to equities, especially with more institutional capital entering the space.

Traders may exercise caution based on historical price seasonality and fading momentum after strong Q1 rallies. Altcoins, especially meme coins, may be vulnerable to pullbacks due to recent hype-driven rallies and speculative flows.

Vugar Usi Zade, COO at crypto exchange Bitget, mentioned that since 1950, the S&P 500 has delivered an average gain of just 1.8% from May through October. Meanwhile, Bitcoin’s average Q2 returns stand at 26%, but with a median of only 7.5%, indicating outlier-driven performance and recurring volatility.

As Q3 approaches, the average return for Bitcoin drops to 6%, with a slightly negative median. Zade highlighted that caution is advised heading into May, as historical data shows that Q4 tends to be Bitcoin’s strongest seasonal period.

In conclusion, while cryptocurrency markets are not bound by traditional Wall Street calendars, market psychology still responds to narratives. The “Sell in May” strategy could potentially become a self-fulfilling prophecy if technical indicators weaken and sentiment shifts.