A crypto trader has identified a regular pattern with Bitcoin (BTC) price movements. Youtube user NicTrades claims that there is always a slight rally, followed by a pullback, around this time of year, and refers to it as the 'January Effect'.
BTC saw a rally past the $4k mark at the start of this month, before falling off slightly. According to NicTrades, this is how the start of January always goes. The January Effect can apparently be traced as far back as 2012, around the time that major investment in the crypto started. The pattern has manifested every year since then.
Somewhere between January 6-10, the price will start to rally. This tends to go on until the middle of the month, at which point it will begin to fall again, bottoming out at the end of the month. Only once in the past 7 years has the price continued to rise.
As NicTrades sees it, there is a selling pattern right now, and this time around the bottom will be around $3380. There is a strong resistance point at this low level, from which BTC should then bounce back.
Interestingly, the January Effect pattern usually goes through a reversal after it hits bottom. NicTrades believes that BTC will retrace the average highs and lows of January, in reverse, after the bottom has been reached. The January high level of around $4100 should then be reached again sometime in February.