Altcoins to Sell in May: A Closer Look

As April closes, many altcoins have shown impressive recoveries, with some surging over 50% from their monthly lows. While this rebound might encourage some investors to expand their portfolios, others may consider "selling in May and going away," especially amidst rising recession worries in the U.S. This article delves into which altcoins might be wise to sell this May.

The Traditional May Sell-Off

The notion of selling assets in May has circulated for years, although data doesn’t consistently support the idea of notable underperformance during this month. In fact, Ethereum typically performs well in May, with Bitcoin recording an average return of around 8%. However, historical data suggests that summer months tend to be challenging for the crypto market. The average returns for Bitcoin during June, July, August, and September hover around -0.35%, 7.56%, 1.75%, and -3.7%, respectively. Thus, selling in May may not be without merit, particularly for altcoins like Algorand (ALGO), Official Trump (TRUMP), and Ethereum (ETH).

Why Sell Algorand (ALGO)?

Algorand stands out as a top candidate for May selling due to significant shifts in its ecosystem. FIFA, a critical partner, is shifting its focus to develop its own blockchain, prompting concerns over Algorand’s future. Additionally, its Total Value Locked (TVL) in decentralized finance (DeFi) has plummeted from over $5 billion to a mere $116 million. The stakers of Algorand have also been offloading their holdings, indicating dwindling demand. With no immediate catalysts to reverse its downturn, ALGO is set to face further losses this month.

The Controversial Case of Official Trump (TRUMP)

Another altcoin to consider offloading in May is the Official Trump meme coin. After announcing an exclusive dinner with Trump for its top holders, the coin saw a meteoric rise of over 130% from its April lows. As the dinner date approaches, one might expect a rebound as investors aim to secure their spots. However, potential risks loom: Trump may cancel or postpone the dinner due to ethical concerns, a trend he has previously exhibited. Furthermore, there’s the risk of a significant price drop post-event, as attendees may sell off their holdings, capitalizing on the price run-up—an example of the "buy the rumor, sell the news" phenomenon.

Ethereum’s Deteriorating Outlook

Ethereum also warrants attention as a prime candidate for May selling. It has formed a notable triple-top pattern on its chart, currently resting below the neckline. This technical formation often indicates imminent further downside, suggesting a bearish forecast for ETH prices, potentially targeting $1,000. Confirmation of this bearish trend could occur if Ethereum manages to rise and retests the neckline, setting the stage for a break-and-retest scenario, a well-known continuation signal in trading.

A Broader Perspective: Avoiding Other Risky Tokens

In summary, the altcoins that investors might consider selling this May include TRUMP, Algorand, and Ethereum. Additionally, caution is advised for other tokens like Pi Network and Aptos, which face significant supply unlocks on the horizon. These events could amplify price volatility, making them less desirable investments during this seasonal downturn in the crypto market.

Frequently Asked Questions (FAQs)

1. Do Bitcoin and altcoins typically underperform in the summer?
   Historically, yes. Bitcoin and many altcoins struggle during the summer months, although May can still yield some positive returns. Careful research is recommended before making selling decisions.

2. Which tokens show bearish catalysts in May?
   Tokens such as Official Trump, Algorand, and Ethereum exhibit potential risk factors prompting a sell-off strategy for May.

3. What technical signals indicate Ethereum may decline?
   Ethereum has formed a triple-top pattern on its weekly chart, suggesting possible further downside in the near term.

By staying informed about market trends and potential downturns, investors can navigate the turbulent waters of the crypto landscape more effectively. Always conduct thorough research before making investment decisions.