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“The rear view mirror is always more clearer than the windshield.”
No one can predict the future with 100% certainty, but we can learn from the past. Looking back at how the markets have performed during previous months and years can give you an idea of what may be in store for the future.
January 2022 closed as a red month and near its historical red average of about -16%. Bitcoin has now had 3 consecutive red months. Can we hope that the month of February can turn things around?
February is know for the most romantic holiday, Valentine’s Day. Love however isn’t really seen in the stock market… In the stock market, February isn’t typically a good month. In fact, from the year 2000 to 2020, February saw an average decrease of -0.65%. February might be a good time to purchase stocks then if the market is down.
What about the cryptocurrency market? Historically, how has Bitcoin performed during the month of February? Bitcoin could certainly use some love…
Surprisingly, February has historically been a good month for Bitcoin! As a matter of fact, seven of the last ten February months have been green, with an average monthly return of 24.5%! When February has been red, the average returns were -15%.
Investors and traders should be cautious this month. The months of April, May, November and December have historically been green months, but 2021 decided that they all would be red last.
The Greed and Fear is currently at “Fear” despite the extremely volatile week we’ve had.
Bitcoin has been following this downward trend for weeks that started way back in November 2021. For 3 consecutive months Bitcoin has closed in the red. The last time this happened was in April 2021. Following those 3 red months, Bitcoin exploded over the next 4 months and ultimately made a new all time high in early November 2021.
This first week of February the bulls showed up and finally broke through this weekly downward trend. On February 4th Bitcoin printed a massive daily candle that put the asset above $40,000! This resistance has since been acting as support. The next level of resistance the bulls need to break is $43,000.
The second week of February the Bitcoin bulls were strong during the first half of the week. Price action started to drop towards the end of the week and the Bitcoin bears closed the last few days with red candles. While Bitcoin did break the $43,000 resistance, it could only hold it as support for three days until it gave way. Bitcoin closed the week at $42,000 and printed a red weekly candle.
During the third week of February I expected a nice reaction from the bulls as Bitcoin technicals had been setup for a good run. While the bulls initially pushed the price up to $44,700 the bears ultimately took control and unexpectedly drove the price down to lower lows on the smaller timeframes. $40,000 was a major support and the bulls couldn’t hold the line… the $38,000 support is currently being tested. If this doesn’t hold, then next up would be $36,000 and below.
This final week of February was extremely volatile. Surprisingly even with so much uncertainty in the world and money markets the Bitcoin bulls still managed to test the $40,000 resistance… But it is clear that the bears are in control as the price failed to breakthrough and it now rests below $38,000.
With the monthly candle closing in just 1 day the charts suggest that Bitcoin will most likely close its fourth consecutive month in the red… which is a scenario we haven’t seen since November 2018. During the months from August 2018 to January 2019 Bitcoin had a run of six consecutive red months! Could history be repeating itself? And how low could Bitcoin go? Some bears are still waiting for a retest of $28,000…. Which is entirely possible. We’ll have to wait and see.
Anything can happen. Always expect the unexpected. Stick to your plan. Take profits. Set your stop losses. Don’t get greedy.
Thank you for your time! If you found this article interesting or helpful in any way please let me know in the comments below. Feel free to follow me for more articles on how I invest or how I earn other free rewards such as crypto, stocks, or gift cards.
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*Disclaimer- I am not a certified financial planner/advisor, certified financial analyst, economist, CPA, accountant, or lawyer, or anything important for that matter. The contents of this article are for informational, educational, and entertainment purposes only and do not constitute financial, accounting, or legal advice. Always do your own research.*
