Bitcoin, the largest digital currency, lost about half its value in the first quarter. Seasonal factors could lead to better things for the cryptocurrency in the second quarter, a period in which bitcoin has historically fared well.
“The world’s largest cryptocurrency by market valuation seems to have found a bottom around the $6,500 mark, having dropped 50 percent in the first quarter – notably, the worst Q1 performance on record. Overall, its safe to say bulls have been struggling to find their feet as indicated by stagnant prices and a narrowing price range,” reports CoinDesk.
Recently, the Bitcoin Dominance Index has been rising, confirming the dominant perch of the cryptocurrency. After bitcoin, the largest cryptocurrencies are Ethereum, Ripple, Bitcoin Cash and Litecoin.
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“The cryptocurrency usually performs well in the second quarter, according to historical data. Seasonal tail winds include an upcoming annual development cycle and a number of big conferences, such as Consensus in May,” according to CNBC.
Catalysts for Bitcoin & Cryptocurrencies
Recently, some big-name investors, including George Soros and the Rockefeller family, signaled their interest in blockchain technology and cryptocurrenices. That against a backdrop of potentially favorable seasonality.
“BTC has registered gains in the second quarter every year – the highest being 1,964 percent in the Q2 2011 when bitcoin jumped from $0.78 to $16.1,” according to CoinDesk. “The 131 percent gain reported in Q2 2017 is the second highest on record.”
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However, other data points suggest bitcoin’s second-quarter rallies, assuming they materialize, do not always persist into the third quarter.
“While stocks often fall out of favor in the summer months, prior to 2017, bitcoin’s summer history was anything but hot. From 2010 through 2016, bitcoin’s average June 8th through October 6th loss was over 22%,” according to Cryptobase.
For more information on the cryptocurrency market, visit our Bitcoin category.