Markets work in mysterious ways.

There are infinite factors, data and information manifested in a single price and its movement. Investors – from the professional analyst to your coworker scrolling Twitter for investment ideas – strive to recognize certain patterns in asset prices to predict where prices are headed.

Seasonality offers a glimmer of hope to investors trying to outsmart the market.

A well-known adage is based on patterns that see stock markets underperform during the summer when traders are on vacation, giving birth to the saying, “sell in May and go away.” There are also people who trade based on the “Santa Claus rally” which predicts the stock market will rise around Christmas and into the first days of the New Year.

Investors can spot calendar effects among precious metals, too. A research paper illustrated that the gold market experiences an "autumn effect" and typically rises in September and November.

The outstanding question in cryptocurrency, which is still in its infancy compared to traditional investments, remains: Is there such a thing as seasonality in crypto?

Investors are perpetually interested in the idea of “timing the market” and discovering patterns and trends to inform their entry and exit points, and crypto investors are no different. Even though the historical data is thin compared to traditional investments, crypto investors have already declared several “seasons.” The most notorious among them are "altcoin season," "crypto (or Bitcoin) winter," and the "DeFi Summer."

Altcoins is a blanket term that includes all cryptocurrencies other than bitcoin such as ether (ETH), XRP, cardano (ADA), and dogecoin (DOGE).

Altcoin season refers to certain times in the market when the prices of alternative cryptocurrencies’ surge relative to bitcoin for many weeks or months.

These events usually happen when bitcoin’s price stalls after a significant rally and investors reallocate their profits to other coins, initiating a new bull market for altcoins.

The best way to recognize an altcoin season is by using the Bitcoin Dominance Index chart, which shows how big of a slice Bitcoin’s total value (market capitalization) is compared to the rest of the crypto market.

Let’s say the Bitcoin Dominance Index stands at 42. This means that Bitcoin’s market share is 42% of the total market capitalization of all cryptocurrencies. When the index rises, Bitcoin is gaining ground relative to all the other coins’ market share. A drop in the index indicates the opposite.

A sharp, sustained fall in Bitcoin's dominance for weeks or months is characteristic of an altcoin season.

The first such altcoin seasons happened in the first half of 2017 and early 2018. Before 2017, bitcoin (BTC) represented nine-tenths of the total crypto market with other coins largely remaining on the fringes. Then came the initial coin offering (ICO) craze and the meteoric rise in the prices of then-unknown coins, such as ether (ETH) and xrp (XRP.)

In less than a year’s time, altcoins totaled more than 50% of the cryptocurrency market.

The last altcoin season arrived in the final few weeks of 2020 and lasted until May 2021. During this period, ETH surged from $600 to more than $4,100, while the prices of smaller coins, such as Cardano’s ada (ADA) and Binance’s binance coin (BNB) experienced huge rises (1,300% and 2,000% gains, respectively).

The term DeFi Summer was first coined in 2020 when decentralized finance projects – cryptocurrencies that let investors lend, borrow and earn a yield – gained traction by luring investors with high, (and as it turned out) unsustainable yields.

It kicked off a speculative frenzy that grew decentralized finance (DeFi) to a $7 billion market by September 2020.

To date, DeFi Summer was a one-off phenomenon, though the buzz around this new sector revived in late spring of 2021 with many people anticipating a second coming. This was reflected by Google search data at the time, but DeFi Summer 2.0 never came into fruition.

Still, decentralized finance has stayed and matured into its own sector of the digital asset industry, boasting an extensive range of autonomous financial applications, such as loans, insurance, crowdfunding, derivatives and even betting.

Read more: What Is Yield Farming? The Rocket Fuel of DeFi, Explained

Crypto winter refers to a prolonged period of falling prices.

The last crypto winter began in early 2018 and saw bitcoin lose over 87% of its value in a year compared to its all-time high in December 2017.

Other cryptocurrencies fell even harder than bitcoin, with a vast majority reporting 90-95% declines from their all-time highs.

When cryptocurrency prices nosedived in May 2021 and then later in the year toward December, many feared we were on the cusp of another dreaded crypto winter.

Read More: Is a Crypto Winter Coming? 3 Things to Consider

Past performance isn’t a predictor of future price action, but we can look for patterns and assess probabilities.

Although bitcoin has been around since 2009, price data from its early years does not carry the same weight as more current data. That’s because the market was far too immature to get reliable price data.

Looking at the largest cryptocurrency’s average monthly returns since 2011, bitcoin tends to perform better during some parts of the year than others. Spring and fall months stand out as generally favorable for BTC.

On the other hand, the summer months are somewhat muted, and its price usually closes the month around the same level it started on average. September is historically a bad month for bitcoin, dropping by about 5% on average.

In the case of Ethereum, we work from even fewer data points. Looking at the average monthly return of ETH since April 2016, we see a division between each half of the year.

Ethereum has performed better in the months of the first half of the year, producing its strongest, double-digit average percentage gains in April and May. Monthly returns in the second half of the year are weaker, with June and September averaging a monthly loss.

Read more: How Does Ethereum Staking Work?

Seasonal effects in the traditional markets are real, and there is no shortage of research and academic papers about it.

The key challenge of analyzing any seasonal patterns in the cryptocurrency markets is the lack of historical data.

Equities date back to the first stock exchange market launched in Amsterdam in 1602 to trade shares of the Dutch East India Company.

Debt markets have been around for thousands of years. The first recorded mention of bonds dates back to 2400 B.C. in Mesopotamia (modern-day Iraq), where the bond guaranteed payment of grains. If the issuer failed to deliver, the amount borrowed was reimbursed.

Even if analysts focus on the recent past, they can work with decades of well-documented information about how asset prices moved within different market conditions.

With crypto markets, the track record is simply too short right now to draw well-founded conclusions.

Bitcoin, the first cryptocurrency launched in 2009, only has slightly more than a decade-long history. For the most part, it has only experienced the market conditions of the post-great financial crisis characterized by low interest rates and quantitative easing. Altcoins have an even shorter history to look back at – a few years at best, in some cases.

There are certain aspects of the human psyche that prevent us from thinking without emotions and making rational investment decisions.

Recency bias is a certain type of cognitive distortion that is a fundamental feature – or bug – in human psychology. It makes people give more importance to the latest events compared to what has happened long ago.

It’s commonplace when it comes to investing, too. Investors tend to overestimate the importance of recent events and believe that they will happen again.

The fact that there was a DeFi Summer or an altcoin season last year does not mean that they should happen periodically or in an orderly fashion.

The danger for investors is if they fixate on the second coming of the DeFi Summer or a single cryptocurrency that pumped this time last year, they might miss new digital assets gaining traction.

If investors believe the price of an instrument goes up, more and more will want to buy it pushing the price higher. This psychological phenomenon is called herding in behavioral finance.

Take this example, if enough people believe in the narrative that a "DeFi Summer 2.0" is around the corner, traders want to get in early to front-run others and buy decentralized finance tokens. Higher demand pushes up the price and reinforces the narrative. Less experienced investors turn their attention to the tokens that surge and jump on the bandwagon, pushing the price even higher. When there aren’t any buyers left in the market, the rally loses steam and the price crashes.

This is what we call a positive feedback loop, and it spirals on until it becomes unsustainable. In extreme conditions, it can lead to asset bubbles, manias and subsequent crashes.

Cryptocurrencies are a young and rapidly growing asset class. Phases of contraction and expansion of an emerging asset class are natural regardless of which page we turn in the calendar.

This doesn’t mean a new altcoin season or a DeFi Summer 2.0 won’t happen. But predicting any “crypto season” right now using past calendar data is a tall order.