12-29-2021, 06:25 AM
The Reverse January Effect: Not as Bearish as it Seems?
<table> <tr><td> <a href="https://www.reddit.com/r/CryptoCurrency/comments/rqddky/the_reverse_january_effect_not_as_bearish_as_it/"> <img src="https://b.thumbs.redditmedia.com/V1dB4hwkgXKs7G7m9E_yFTy1sCpp6kjG8FoMZQugybY.jpg" alt="The Reverse January Effect: Not as Bearish as it Seems?" title="The Reverse January Effect: Not as Bearish as it Seems?" /> </a> </td><td> <!-- SC_OFF --><div class="md"><p><a href="https://www.investopedia.com/terms/j/januaryeffect.asp">The January Effect</a> is a well-documented behavioural finance phenomenon. It says that, on average, assets tend to rise more in January than the rest of the year.</p> <p>This has been attributed to a number of things:</p> <p>- People assets in January after selling in December (they sold in December for tax-loss harvesting)</p> <p>- Bonuses are paid in late-December/January and people use their bonuses here</p> <p>However, the opposite has been found in crypto, called the reverse January effect.</p> <p>The reverse January effect states that crypto actually does worse on average in January than in other months. Research evidence:</p> <p>- <a href="https://www.sciencedirect.com/science/article/pii/S1544612318304513">Seasonality in Cryptocurrencies</a> - Found a lack of seasonality in crypto, apart from a reversed January effect</p> <p>- <a href="https://www.sciencedirect.com/science/article/pii/S1544612319311316">Calendar Effects in Bitcoin</a> - Found a reversed January effect</p> <p>There is fairly strong research evidence to suggest a reversed January effect, but let's also look at the charts ourselves:</p> <p>​</p> <p><a href="https://preview.redd.it/q5bifpoei9881.png?width=1372&format=png&auto=webp&s=edce8ba9eee2ff274613befbfababec6bd179610">BTC Price January 2016</a></p> <p>​</p> <p><a href="https://preview.redd.it/iak62ttgi9881.png?width=1362&format=png&auto=webp&s=c82301e789cfdf92718e42bb2b00e4e70b9576d3">BTC Price January 2017</a></p> <p>​</p> <p><a href="https://preview.redd.it/gmtkc7dji9881.png?width=1352&format=png&auto=webp&s=9c66b3d9a6afbf50bf0bcecb8ef2a6890e9276a9">BTC Price January 2018</a></p> <p>​</p> <p><a href="https://preview.redd.it/kk3dwjuqi9881.png?width=1353&format=png&auto=webp&s=2ed54d1b421c9680008d6c26ade43bd25d025b6a">BTC Price January 2019</a></p> <p>​</p> <p><a href="https://preview.redd.it/bj2ux0kvi9881.png?width=1338&format=png&auto=webp&s=62d009c5e948770cc138af4aec6a4783dcc4a366">BTC Price January 2020</a></p> <p>​</p> <p><a href="https://preview.redd.it/3qv0so21j9881.png?width=1353&format=png&auto=webp&s=e5352320157251f8eda2911250b9a8faee22947f">BTC Price January 2021</a></p> <p>As you can see out of the 6 years from 2016 to 2021, January has had:</p> <p>- 3 red months</p> <p>- 1 flat month</p> <p>- 2 green months</p> <p><strong>This makes the effect slightly less concerning, especially with the steam that we are currently building before January and the small sample size.</strong> Admittedly, a glance at charts is no substitute for a proper statistical analysis, but it can really help put things into perspective. </p> <p><strong>Tl;dr There is no January Effect in crypto, but the Reverse January Effect is not to be feared.</strong></p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/Laughingboy14"> /u/Laughingboy14 </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/rqddky/the_reverse_january_effect_not_as_bearish_as_it/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/rqddky/the_reverse_january_effect_not_as_bearish_as_it/">[comments]</a></span> </td></tr></table>Kind Regards R
<table> <tr><td> <a href="https://www.reddit.com/r/CryptoCurrency/comments/rqddky/the_reverse_january_effect_not_as_bearish_as_it/"> <img src="https://b.thumbs.redditmedia.com/V1dB4hwkgXKs7G7m9E_yFTy1sCpp6kjG8FoMZQugybY.jpg" alt="The Reverse January Effect: Not as Bearish as it Seems?" title="The Reverse January Effect: Not as Bearish as it Seems?" /> </a> </td><td> <!-- SC_OFF --><div class="md"><p><a href="https://www.investopedia.com/terms/j/januaryeffect.asp">The January Effect</a> is a well-documented behavioural finance phenomenon. It says that, on average, assets tend to rise more in January than the rest of the year.</p> <p>This has been attributed to a number of things:</p> <p>- People assets in January after selling in December (they sold in December for tax-loss harvesting)</p> <p>- Bonuses are paid in late-December/January and people use their bonuses here</p> <p>However, the opposite has been found in crypto, called the reverse January effect.</p> <p>The reverse January effect states that crypto actually does worse on average in January than in other months. Research evidence:</p> <p>- <a href="https://www.sciencedirect.com/science/article/pii/S1544612318304513">Seasonality in Cryptocurrencies</a> - Found a lack of seasonality in crypto, apart from a reversed January effect</p> <p>- <a href="https://www.sciencedirect.com/science/article/pii/S1544612319311316">Calendar Effects in Bitcoin</a> - Found a reversed January effect</p> <p>There is fairly strong research evidence to suggest a reversed January effect, but let's also look at the charts ourselves:</p> <p>​</p> <p><a href="https://preview.redd.it/q5bifpoei9881.png?width=1372&format=png&auto=webp&s=edce8ba9eee2ff274613befbfababec6bd179610">BTC Price January 2016</a></p> <p>​</p> <p><a href="https://preview.redd.it/iak62ttgi9881.png?width=1362&format=png&auto=webp&s=c82301e789cfdf92718e42bb2b00e4e70b9576d3">BTC Price January 2017</a></p> <p>​</p> <p><a href="https://preview.redd.it/gmtkc7dji9881.png?width=1352&format=png&auto=webp&s=9c66b3d9a6afbf50bf0bcecb8ef2a6890e9276a9">BTC Price January 2018</a></p> <p>​</p> <p><a href="https://preview.redd.it/kk3dwjuqi9881.png?width=1353&format=png&auto=webp&s=2ed54d1b421c9680008d6c26ade43bd25d025b6a">BTC Price January 2019</a></p> <p>​</p> <p><a href="https://preview.redd.it/bj2ux0kvi9881.png?width=1338&format=png&auto=webp&s=62d009c5e948770cc138af4aec6a4783dcc4a366">BTC Price January 2020</a></p> <p>​</p> <p><a href="https://preview.redd.it/3qv0so21j9881.png?width=1353&format=png&auto=webp&s=e5352320157251f8eda2911250b9a8faee22947f">BTC Price January 2021</a></p> <p>As you can see out of the 6 years from 2016 to 2021, January has had:</p> <p>- 3 red months</p> <p>- 1 flat month</p> <p>- 2 green months</p> <p><strong>This makes the effect slightly less concerning, especially with the steam that we are currently building before January and the small sample size.</strong> Admittedly, a glance at charts is no substitute for a proper statistical analysis, but it can really help put things into perspective. </p> <p><strong>Tl;dr There is no January Effect in crypto, but the Reverse January Effect is not to be feared.</strong></p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/Laughingboy14"> /u/Laughingboy14 </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/rqddky/the_reverse_january_effect_not_as_bearish_as_it/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/rqddky/the_reverse_january_effect_not_as_bearish_as_it/">[comments]</a></span> </td></tr></table>Kind Regards R