Video summary
The recent green close of July has led many observers to prematurely declare the end of Bitcoin's summer sell-off and suggest that market bottoms have been found. However, a detailed analysis of historical data reveals this conclusion is likely premature, as current conditions closely mirror previous bear market summers where significant declines followed immediately after mid-summer rallies. By mapping price action across multiple years, it becomes evident that while the average performance over all fourteen Bitcoin summers appears positive due to outlier bull markets like 2017 and 2012, this headline figure is misleading for today's context. When excluding these exceptional growth periods where Bitcoin was in a raging bull market or highly immature, the true historical average during summer months actually shifts to a negative trend of approximately minus three and a half percent, indicating that summers are generally unfavorable for price appreciation rather than being safe zones as commonly believed.
The distinction between bear markets and normal market cycles further clarifies why investors should remain cautious despite recent gains. During every recorded Bitcoin bear market, including the years 2014, 2018, and 2022, prices suffered substantial losses ranging from minus twelve to thirty-nine percent by the end of summer, with August and September consistently proving to be the worst performing months. Even in non-bear markets where Bitcoin was above its highs or during bull cycles, summers still resulted in negative returns when starting points were more than thirty percent below all-time peaks. The current situation aligns closely with historical data showing that after day fifty-nine of summer, prices typically face further declines averaging around twenty-three percent before the market turns, suggesting that the damage often occurs later in the season rather than earlier as some might expect based on short-term rallies.
Underlying these seasonal price patterns is a critical issue regarding trading volume and liquidity, which significantly exacerbates downturns during the summer months. Data shows that July through September represent the thinnest trading periods of the year, with average volumes dropping by double digits compared to peak activity in late autumn like November. This lack of sufficient buyer interest means there are not enough participants left standing to absorb selling pressure when prices begin to fall, allowing declines to travel much further than usual before stabilizing. Consequently, even if Bitcoin does not drop another thirty-eight percent immediately as some fear, the structural weakness caused by low liquidity during these specific months makes it highly probable that the market bottom has not yet been reached and that August and September will likely continue to drag prices lower until sufficient volume returns later in the year.
Read the full video transcript
July closed green exactly as we
predicted a month ago. It looks like
it's going to close around 8.8%
up on the month. And now, just like
clockwork, everyone has decided that the
summer sell-off is over and that the
bottom is in for Bitcoin. The exact July
trap that we spoke about in last month's
video. So, this is a map that we've been
tracking this entire bear market and
it's been pretty much following it to
the T. And you can see here where we're
about to cross over into the August and
September part of this map. And [music]
you can pretty much see what I'm
expecting. So, with everyone calling the
Bitcoin bottom now that price is going
up during July, I decided to go back and
test every single Bitcoin summer to show
you guys what's actually true and what
the data actually says. So, let's start
with looking at exactly where we are
compared to every other bear market
summer. Starting with 2014, you can see
that at this exact point in the summer,
we were down about 10%. In 2018, we were
actually up 9%. In 2022, we were down
26%.
And as of right now, today, as of this
recording, we're down about 12% so far
throughout the summer. Now, I'm showing
you the bear markets because obviously,
right now we're in a bear market. But, I
am also going to show you guys every
single Bitcoin summer so that you can
see that it can't go beyond just uh
Bitcoin bear markets. So, let's dive
right into it. If we line up all 14
summers and average them, you get a
positive number, right? The summer
average is plus 13%. So, if we just look
at this headline, then everyone decides,
"Hey, the summers are fine. What are you
talking about, Jay? What are you talking
about, Josh? Summers are perfectly fine.
There's nothing to fear during the
summers." So, this headline is true, but
it's also pretty useless. So, first off,
there's two years that are outlier years
that are basically dragging that number
up to plus 13%. We have a year in 2012,
which was plus 136%
and 2017, which was a raging bull
market, by the way, which was plus 88%,
right? Completely different context
because one, we This is not 2012
anymore. We're The Bitcoin is much more
mature at this point, so we're not going
to get these type of numbers in a month
anymore from Bitcoin's price.
>> [music]
>> And also, we're not in a bull market, so
we're not going to see anything like
this, either, right? We can see in all
the other bull markets, in 2021, it was
plus 17%,
2020, plus 14%,
and 2025, plus 9%, right? We're not
getting these crazy numbers, plus 88%,
plus 136%. And then, if you split it to,
"Okay, how many green summers did we
have versus red summers?" It's basically
a coin flip, right? 1 2 3 4 5 6 7 green
summers, and 1 2 3 4 5 6 7 red summers.
So, at that point, it's a coin flip. So,
what makes the difference? Well, if we
split it between bear markets and bull
markets, every bear market, 2014, minus
38%, 2018, minus 12%, 2022, minus 39%.
So, now we're starting to see a pattern.
And also, if we remove the two outlier
years of plus 136%, plus 88%, the
average of plus 13% flips to minus 3 and
1/2%.
Right? These are all very, very
important things and figures that you
need to look at. You need to be able to
look at the entire data, not just the
overall headline, right? That's why we
we go into the details of the data. So,
an average built on a couple of monster
years does not describe a normal year.
It describes the monsters, right? It
describes the outliers. So, by taking
that out, we get minus 3.5%
average during summers for Bitcoin. And
then the real problem is that these
aren't 14 versions of the same thing.
They're two completely different markets
like we just spoke about blended into
one average that describes really
neither of them. So, if we separate the
bear markets from the bull markets, we
start seeing some interesting patterns.
First of all, the best bear market
summer was minus 11.9%,
which is pretty much exactly where we're
sitting at right now as of this
recording. Every other summer during the
bear market was worse than minus 11.9%.
Now, the worst normal summer, so this is
if there was no bear market, it was
whether it was a bull market or whatever
it was, then that number becomes minus
6.2%.
So, now if we start just looking at the
bear markets themselves, things get a
little bit interesting, right? If we're
looking at exactly where we are or where
we were at this point during every other
bear market in Bitcoin's history, this
is what it looked like. So, we are 59
days into the summer right now. In 2014
at this point we were minus 10.2% at
this exact point in the summer. We ended
up the summer minus 37.7%.
Okay? In 2018, it was the only year that
we were actually positive during this
exact moment in Bitcoin summer during a
bear market. We're up plus 8.9%. We
ended up in minus 11.9%,
right? Um and then in 2022 at this exact
point, we're down already 25.6%
and we ended up minus 38.8%
for the summer. So, this clearly shows
that the damage has always come after
this point. And that points to August
and September. Every August and
September was the worst part of every
summer. So, measured from today, that
average that Bitcoin's price has fallen
from this point exactly is minus 23%.
In 2014, it fell another 31%. In 2018,
it fell another 19%. And in 2022, it
fell another 18% from where we are today
in the summer, right? Day 59 of the
summer. So, now let's think about why
exactly does this happen during the
summer? Like what exactly is leading to
this, right? And one of the answers is
liquidity overall and just volume. If
you look at the trading volume for
Bitcoin versus an average day, you can
see that the four thinnest months of the
year are July, August, September, and
June, which is exactly the summer. In
June, the average volume drops off by
10%. In July, it drops off by 16%.
August by 15%, and September by 12%.
Compare that to a month like, let's say
November for example, where the average
volume is above by 36%. So, the issue
with low volume is that when Bitcoin
drops, the drop can travel further than
usual because there's just not enough
buyers in there to basically uh stop the
price from falling further. So, now
let's just specifically look at August
and September, how price has performed
during these same exact times that we're
in right now. And when we kind of map it
out, we're going to see something that's
a bit shocking here. So, this is a map
of every time that Bitcoin entered
August more than 30% below its high.
This has happened 10 times, and out of
those 10 times, only twice did Bitcoin
actually end the summer green in August
and September. The middle outcome was
minus 11.2%
throughout August and September. So,
this is not only the bear markets,
right? 2014, 2018 minus 15%, 2022 minus
17%, right? This has also happened
during normal markets or bull markets.
So, 2015 minus 17%, 2016 minus 3%, 2019
minus 18%, 2020 minus 5%, and 2023 minus
8%. So, this goes beyond just are we in
a bull market or a bear market, right?
Overall, summers are just bad for
Bitcoin, especially when it's below 30%
from its high. Now, I'm not saying that
Bitcoin's about to drop another uh 38%
from where we are right now. I don't
know that for sure, and anyone who's
telling you anything different is
probably lying or selling you something.
But what I do know, and what I do have,
is all the data for Bitcoin summers. I
split them up into bear markets and bull
markets. I've split them up into uh
where we are today from this point
forward. I've split them up in the times
where Bitcoin was beyond 30% from its
all-time high, and all the data kind of
points to the same direction. Then, if
you kind of put that together with where
we are in the bear market overall, it
tells us that the bottom is not in,
right?
Every single bottom ever in Bitcoin's
history has pointed to a 12-to-13-month
bottom, right? That's usually when the
bottom comes in. I've done a lot of
research on this as well, and all the
data kind of points to the same place.
Now, just looking at the data from the
summer, it points to Bitcoin going
lower. So, all it it we're basically
looking for
uh we're trying to put a puzzle
together, and all the pieces of the
puzzle kind of are fitting together
telling the [music] same story. So, if
the bottom is not in right now, um if
the bottom is not even in during August,
then when will the bottom actually come
in? I did an entire video explaining
exactly my thoughts and the data behind
all of this. I even went as far as to
put an exact time frame and date on
this. I showed the entire model, and I
put it on the record. I'll put it on the
screen for you guys to go ahead and
check that out. And if you want the full
summer breakdown, every number from
today, I'm going to put it in a free
guide. Just comment the word summer, and
I'll send it over to you. So, I'll see
you guys on that next video.