Historically, Q1 Isn’t a Strong Quarter for Bitcoin Unlike Ethereum; Primed for a Solid Performance
But February is expected to be better than Jan. for Bitcoin as both the top assets make a green start of the month.
If past performance is any indication, February is setting up for a nice movement in crypto asset prices.
If we look at January, it did what it does best, a disappointing ending. As trader Edward Morra noted, “January is living up to its name as the second-worst month for BTC historically.”
While the start of the year was an explosive one as the price of Bitcoin went from about $29,000 to $42,000. However, this all-time high was hit by Jan. 8, and the rest of the month ended up bearish and with sideways action.
We are trading around $35,000, gaining some momentum this week, marking the start of February.
“At key resistance now. If bulls are strong enough and clear current resistance, I'll flip bias to bullish,” said trader Wolf about Bitcoin price action.
Interestingly, while Q4 works best for the leading digital asset in terms of price performance, for Ethereum, it is the first two quarters that has historically seen the best returns.
“Ethereum shows clear seasonality: The first two months of Q1 & Q2 are the best performing months of the year,” noted crypto enthusiast Unfolded.
Today, Ether went up more than 7% to test the ATH yet again, going as high as $1,465.
Just last week, Grayscale opened its Ethereum Trust (ETHE) after about 40 days, and next Monday, CME will be listing Ether futures, both of which can further push the prices of the digital asset higher.
Bitcoin, meanwhile, is yet to break out of its range and above $36k. As for the market looking for the same short squeeze to happen to Bitcoin, as with GME, given that hedge funds are north of $1 billion short on digital assets, that might not be the case here.
As we reported, the leveraged funds that are short tend to be long on GBTC and take advantage of the premium and CME basis. While the short position on Bitcoin is likely to be hedged, the market's size is also “vastly different than GameStop,” noted Lennix Lai, Director of Financial Markets of crypto exchange OKEx.
Still, overall the market is healthy and looking ready for higher price levels as trader and economist Alex Kruger said,
“Eager to see it all rip again. Risk is on across risk assets. Tradfi traders got too bearish for no good reason. And conditions are excellent for crypto. Only things that concern me here are the USD, the GBTC premium, and the fact that leverage builds up too fast on small moves.”