Not All Good News Is a Buy Signal. Sometimes, the Most Positive Headlines Mark a Turning Point – a Phenomenon Investors Know All Too Well as “Sell the News.”

The first week of May 2025 saw a flood of positive headlines pour into the crypto market. Bitcoin surged past $103,000 for the first time since January.

The cryptocurrency market experienced a week of rapid price swings and shifting investor sentiment, leading to the familiar phenomenon of “Sell the News.”

As May 8 unfolded, a wave of positive headlines began rolling into the crypto sphere. Bitcoin price surged past $103,000 for the first time since January, smashing through the $100,000 psychological barrier. The market also witnessed a significant increase in the Fear & Greed Index, which jumped from 48 to 70 in just three days.

Additionally, the total global crypto market cap surged by over $160 billion, surpassing the $3.2 trillion mark. At the same time, U.S. jobless claims dropped to 228,000, falling below expectations of 234,000. This economic news fueled investor optimism that the Federal Reserve might keep interest rates stable or even initiate a rate-cutting cycle in Q3.

The bullish sentiment sent altcoins like SOL, AVAX, TON, and INJ soaring by more than 15% over just four trading sessions. However, within less than 48 hours, the market underwent a sharp reversal. Bitcoin slipped below $101,800, while Ethereum fell back to around $2,100. Several altcoins also shed between 5% and 10% of their value as capital rotated out of the week’s top gainers.

The rapid shifts in crypto prices and the subsequent selloffs had investors discussing a common phrase: “Sell the News.” In traditional finance, the saying “Buy the rumor, sell the news” is an unwritten rule backed by decades of market behavior. But in crypto, where reactions are faster and greed often outweighs fundamentals, this phenomenon becomes even more pronounced.

One of the most classic examples was the launch of the ProShares Bitcoin Futures ETF (BITO) in October 2021. In the lead-up to approval, BTC rallied nearly 40%, advancing from $43,000 to an all-time high of $67,000. However, just three days after the ETF began trading on the NYSE, Bitcoin reversed sharply and entered a months-long correction, finally ending the year at $47,000.

As the dust settled, it became clear that investors had expected good news to drive fresh inflows, but instead, it marked a sentiment top.

A similar pattern emerged in January 2024 when the SEC rejected multiple Spot Ethereum ETFs and markets dipped only modestly. Later, as rumors of approval resurfaced in late February, ETH experienced a surge from $1,650 to $2,300 in just 10 days. But after the SEC officially greenlit four Spot ETH ETFs in March, unexpectedly, ETH dropped 12% during the first week following the announcement.

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More recently, in April 2025, Pudgy Penguins’ $PENGU token soared to $0.48 following a Walmart partnership announcement and a spike in Google Trends interest. Remarkably, just one day later, the token crashed by over 60% as the team unlocked a large tranche of tokens for the community.

The meme coin market has also repeatedly echoed this pattern. For instance, BONK on Solana experienced a surge of over 300% in six days with rumors circulating about a major centralized exchange partnership. However, just two days after the news was confirmed, BONK lost nearly half its value within 48 hours.

The “Sell the News” phenomenon usually occurs not because the news itself is bad, but rather because the market has already ‘priced in’ the good news, with expectations outrunning reality.

According to CryptoQuant, between April 28 and May 10, stablecoin inflows to exchanges increased by 27%, suggesting that investors were preparing liquidity to ‘ride the news.’

Source: CryptoQuant

However, during the same period, the number of whale wallets, defined as wallets holding between 1,000 and 10,000 BTC, remained largely flat. This observation might indicate that the new inflows stemmed primarily from short-term speculators.

The technical indicators also flashed warnings. On May 9, the daily RSI for both Bitcoin and ETH crossed the 70 level, which is commonly associated with overbought conditions. At the same time, trading volume began to decrease despite the price continuing to rise—a classic technical divergence that often precedes a price reversal.

Data from Glassnode showed a slight uptick in BTC deposits to exchanges on May 10, which coincided with the market's short-term top.

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