📆📉 Why does the market tend to drop at the beginning of the month? Truth or myth?
Have you heard that "the market always drops at the beginning of the month"?
🧐 It's not a rule, but there are indeed recurring factors that help explain this behavior. Let's understand:
🔄 1. Profit Taking from the End of the Previous Month
Many traders close positions at the end of the month to secure gains.
➡️ This can lead to technical selling at the beginning of the month, putting downward pressure on prices.
🧾 2. Fund Rebalancing
Large institutional funds adjust their portfolios monthly.
➡️ Sometimes this requires targeted asset sales, which can also lead to drops.
💳 3. Salary Inflow = More Liquidity?
With salaries coming in, some believe that new capital stimulates purchases.
✅ Yes, but this depends on market sentiment.
➡️ If the market is pessimistic, this liquidity won't hold up against selling pressure.
⚠️ 4. Macroeconomic News
At the beginning of each month, indicators such as payroll in the US, PMIs, and inflation are released.
➡️ This data directly impacts the markets — especially crypto, which is sensitive to risk appetite.
📌 Summary:
Not every beginning of the month sees a drop, but:
Technical + institutional factors + macroeconomic data
= Increased volatility right in the first days.
🎯 The secret is: don't be guided by myths, but by analysis!
