Why does the crypto market tend to drop in August?

IconCryptoNewsTerminal Staff02 Aug, 2024

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Why does the crypto market tend to drop in August?

Coinbase, a leading cryptocurrency exchange, has reported that cryptocurrencies have historically performed poorly in the month of August. According to data analyzed by The Block, Bitcoin (BTC), the largest cryptocurrency by market cap, has dropped an average of 2.8% in August over the past five years. There are a few reasons why cryptocurrencies may tend to slump in August. These reasons include: - Lower trading volume: Trading volume typically slows down in August as people take vacations and spend more time outdoors. This can lead to less demand for cryptocurrencies and lower prices. - Reduced institutional activity: Institutional investors, such as hedge funds and pension funds, tend to be less active in August. This is because many of these investors take time off during the summer months. - Increased volatility: Cryptocurrencies are known for being volatile, and this volatility tends to increase in August. This is because there is less liquidity in the market, which can make it easier for prices to move quickly in either direction.

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