: Altcoins Surge in 2021: January Effect Fuels Crypto Recovery

• Altcoins have surged in the last week, with GALA and Lido DAO leading the charge with 138% and 61% gains respectively.
• This surge could be attributed to a phenomenon called the ‚January effect‘, a calendar effect that occurs during the month of January in financial markets.
• Other calendar effects include ’sell in May and go away‘, the Halloween effect, the July effect, and the Santa Claus rally.

The crypto markets have been on a roller coaster ride in the last year, and the start of the new year has seen a flurry of activity. After a brutal drawdown of nearly 90% across the board, many altcoins are showing promising signs of a potential recovery. This rally could be due to a phenomenon known as the ‘January effect’, a calendar effect that takes place during the month of January.

The January effect is just one of the many calendar effects that exist in financial markets. Others include ‘sell in May and go away’, the Halloween effect, the July effect, and the Santa Claus rally. These effects, which have been documented by researchers for decades, describe the tendency of certain asset classes to increase or decrease in value during certain times of the year.

CoinMarketCap’s top crypto gainers and losers over the last seven days offer a glimpse into just how powerful this effect can be. GALA, for example, has topped the list with an impressive 138% growth in the last week. Lido DAO is right behind with 61% gains over the same timeframe. Dozens of other altcoins have surged 20% or more, indicating the broad strength of the January effect. Even specific altcoins caught up in the FTX-related fallout, such as Solana, have posted the largest monthly bullish candle since August 2021.

The January effect is an important phenomenon that investors and traders need to be aware of. By understanding how it works and how to identify it, traders can use it to their advantage and capitalize on potential opportunities. As the year progresses, it will be interesting to see if other calendar effects take hold and if the January effect continues to drive the markets.

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