With the spookiest holiday of the year fast approaching, there’s another factor to consider when investing this time of year: the “Halloween effect.”
A popular superstition among traders who believe that Bitcoin and the stock market in general perform better from late October to late May.
Interestingly, according to the historical data obtained by Finbold, the past three Halloweens have seen a year-over-year increase in the Bitcoin price, but with Bitcoin currently trading just above $19,000, it would be a long shot to suggest that The digital asset may increase for the fourth year in a row, but scarier things have happened.
Notably, 28,488 respondents from the CoinMarketCap community peg the Halloween 2022 Bitcoin price prediction at $21,248, a significant increase from today’s price but a -65.17% decrease from last year. On October 31, 2021, Bitcoin traded at $61,300 with a market cap of $1.156 trillion, up 344.39% from its Halloween 2020 price of $13,794.
Looking at the price of Bitcoin on October 31, 2017, it was trading at $6,468 with a total market cap of $107.7 billion, which shows that even though this year’s estimate is not very bullish, there has been significant growth in its usage of the digital. assets and cryptocurrencies as a whole during that time.
Will the Halloween effect take place?
The cryptocurrency market erupted into a frenzy after October 31, 2017, when Bitcoin hit a record high of $20,000 in December before retreating. Nevertheless, Bitcoin’s price increased by approximately 52% from Halloween 2017 to May 1, 2018.
The unusual superstition, also known as the ‘Halloween Strategy’ and the ‘Halloween Indicator’, could well see a price increase for Bitcoin after October 31st this year, for the rest of Q4 and heading into next year. However, this will more likely be due to fundamentals and market sentiment as opposed to some hocus pocus.
Meanwhile, data reveals that investors are taking Bitcoin from crypto exchanges, reducing the risk of a future sale. The exchanges witnessed a loss of 40,572 Bitcoin in a single day on October 18, the largest daily amount of Bitcoin to leave the trading platforms in the last four months.
This data could suggest that prices could stabilize around $19,000 this Halloween, especially considering that Bitcoin volatility is now said to be “pretty close to an all-time low.”
Although Bitcoin’s price may not rise year-over-year from Halloween 2021 to 2022, the latest Finbold survey shows that by the summer of 2022, 18% of Americans had invested in various cryptocurrencies. The number is a 125% increase from the 8% of Americans who had a stake in the crypto sector in the summer of 2020; if growth continues at this pace, the Bitcoin price on October 31 next year may be a little less scary.
This story originally appeared on finbold.com.
