For many reasons, including its volatile movements in November and a series of tax losses, to the nature of trading that does not stop round the clock, Bitcoin tends to rise dramatically in November every year.
In November, for example, world’s largest cryptocurrency fell for 10 consecutive days last Tuesday, when it hit its largest decline. Even with Wednesday’s 6% rebound, the decline pushed the price down by around 17% and put it at the pace in the worst month since November last year.
November was also significantly more volatile for Bitcoin than in other months. Since 2011, the biggest monthly change has always been up or down in November, with the next average move at around 20 percentage points.
“It just moves in ways that are not cyclical like other businesses and other markets,”. “Towards the end of the year, other asset classes may begin to calm down due to the holiday season and others. Toward the end of the year, other asset classes may start to quiet down just because it’s the holidays and things like that,” said Bobby Choo, a partner at CMS Holdings. But in crypto, because of the global nature and it never closing effectively, things are always happening.”
For years now, Bitcoin moves have been tremendous in the Thanksgiving season and other holidays generally across the United States. This time in 2017, for example, Bitcoin optimists were lucky that investors stopped investing in this period, while they rose at an unprecedented rate. Through Thanksgiving that year, Bitcoin has already risen by 760% for the same year.
Last year, the day before Thanksgiving, Bitcoin was trading at $4,400, after falling 69% for the same year.
Jeff Dorman, chief investment officer at Los Angeles-based Arca Investment, said: “Price and emotions tend to work together so when prices are at all times high, everyone is cheerful.“
This year despite its recent decline, Bitcoin still reaches a 95% rise in 2019, although it is far from its all-time high when it hit $20,000 in December 2017. Plenty of other negative headlines also led to lower prices.
“There are peaks and troughs in all financial markets; the cryptocurrency market is not — and should not be — any different,” said the firm’s chief executive officer. “Each time there is a dip in the market or a bout of volatility in cryptocurrencies, the crypto haters declare that digital currencies are finished — only for them to subsequently experience a rally. The same people do not make such extreme and unfounded statements with most other financial markets.”