Sixth Sense

Sixth Sense

Crypto Inferno

So this is an odd one. Bitcoin has reversed its short-term trend on the 6th of each month since the beginning of the year.

This unusual piece of trivia/trading advice (delete as applicable) was posted on TradingView recently. It seems that from January to May 2018, BTC’s price has changed direction on the sixth day of every month (see https://usethebitcoin.com/the-6th-pattern-on-bitcoins-price-coincidence-or-market-manipulation/).

6 January marked the start of the downtrend in earnest, as bitcoin made the second spike up of its bubble’s double top.

6 February was the capitulation sell down below $6,000.

6 March saw a local top on the recovery bounce to around $12,000.

6 April was the fall back to the low $6,000s.

6 May saw BTC rise towards the $10,000 line, before rejecting it and starting to fall again.

6 June…

What is the explanation for this odd pattern?

Just about any rationalisation looks like clutching at straws. You might argue that people get paid at the end of the month, and it takes a few days for fresh fiat to hit exchanges. But why has the pattern only held this year, and what of the fact that two out of every seven times, the 6th falls on a weekend so bank transfers don’t arrive that day?

Could it be deliberate manipulation? If so, why on earth would a group of whales co-ordinate the massive volume necessary to contrive such market patterns?

Is it just ‘one of those things’? Markets move in cycles, and this particular cycle happens to take a month. Exactly a month. Never more, never less. That doesn’t seem too convincing either.

Or it could simply be that you can impose a rule that fits any series of data points, providing the set is small enough. Five dates isn’t that many, so the odds of finding one day a month that marks a reversal isn’t particularly high.

Right now that’s the best explanation, but we’ll be watching with interest to see what happens on 6 June. If the rule holds, we’ll touch $7,100 one last time then before heading up again.

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