Decoding the September Slump: 5 Important Bitcoin Developments This Week

As Bitcoin limps into a new week, struggling to maintain a grip around the $26,000 mark, the aftermath of a recent rapid crash still casts a shadow over the market. The crash, which occurred just ten days ago, has left bulls grappling for control as the expected relief bounce remains elusive.

With September historically being a lackluster month for Bitcoin, and the closure of August imminent, the question arises: Could there be another unexpected downward spiral waiting in the wings?

While macroeconomic triggers take a backseat this week, with the highlight being the Personal Consumption Expenditures (PCE) Index data, the crypto community remains on edge. The absence of a rebound in sight keeps many traders and analysts bracing for potentially worse scenarios.

Here, the pivotal talking points in Bitcoin’s price performance for the week ahead.

BTC Price Struggles Ahead of Monthly Close Predicting the conclusion of Bitcoin’s latest weekly candle is no challenge, particularly given the historical context of previous closes. Despite managing to hold onto $26,000 at the close, BTC/USD immediately slipped afterward, briefly touching $25,880 before settling a bit higher. This decline, as seen on TradingView data, resulted in multiday lows – a situation that popular trader Skew suggested might have been driven by short-sellers.

Skew’s analysis indicated that shorts were being piled on during the weekend, potentially anticipating a market move surrounding the opening of US futures and the European session on Monday. This weekend behavior was further characterized as “max pain price action.”

The upcoming monthly close held a pivotal place in the minds of market participants, as the volatility of August led to an 11% loss. Keith Alan, co-founder of monitoring resource Material Indicators, foresaw a dip to multimonth lows, highlighting a lack of buying activity by whales.

The accompanying order book chart also depicted a scarcity of bid liquidity, with only modest interest around $25,500.

Popular trader Crypto Tony echoed the sentiment, emphasizing the need for a trigger either at the $25,000 lows followed by a rebound, or a flip of $26,700 to support. Until then, Bitcoin’s mid-range status keeps any entry relatively unsafe.

Rekt Capital, a prominent analyst, cautioned that moving averages which once served as support before the crash might now act as resistance, potentially shaping the market’s future.

A Glimpse into a Dismal August August has, by no means, been a prosperous month for Bitcoin – even when judged by the standards of past Augusts, which have seldom favored bulls. With an 11% drop in BTC/USD during the month, and the weekly close looming, market observers can’t help but anticipate further developments.

Comparative data from CoinGlass reveals that August 2023 is in a neck-and-neck race with the previous year to become Bitcoin’s worst August since 2015. In 2022, the price of BTC plummeted by 13.9%, marking the beginning of six months of downturn.

Some experts believe that September could follow suit, resulting in a month nearly as dire as August, based on historical patterns.

Rekt Capital posed a thought-provoking question last week: “Could Bitcoin Crash to $22,000 In September?” Reflecting on historical data, Rekt Capital noted that September usually experiences single-digit drawdowns. Given Bitcoin’s recent double top on weekly timeframes, a target of $22,000 doesn’t seem implausible.

A “Longest Bear Market in History” Analyzing year-on-year percentage returns for BTC/USD, the prolonged bear market becomes evident. According to Michaël van de Poppe, founder and CEO of trading firm Eight, this has turned out to be the “longest bear market in history.”

Comparing it to the situation in 2015, van de Poppe characterized the current bear market as a period of sideways movement that’s eroding faith in crypto. He pointed out that despite solid fundamental growth, Bitcoin’s current price is nowhere near the peak valuation of November 2021. The ongoing bear market has endured for 490 days, making it a longer-lasting slump than in 2015, which lasted 386 days.

Van de Poppe observed that positive news events, like the potential approval of the United States’ first Bitcoin spot price exchange-traded fund (ETF), haven’t yet influenced market sentiment, as they lag behind the market’s ‘bear market modus.’

Macro Data Amid Crypto Indifference Bitcoin and altcoins have been showing little concern for macroeconomic developments recently. Even major events such as Federal Reserve interest rate adjustments and releases like the Consumer Price Index (CPI) have had minimal impact on the crypto markets.

Jerome Powell’s comments at the Jackson Hole Economic Symposium, despite expectations, continued this trend. This week, as PCE data is set to be released shortly before Bitcoin’s monthly close, it’s likely that macroeconomic developments will once again take a back seat to the cryptocurrency’s own dynamics.

Despite this, The Kobeissi Letter, a financial commentary resource, anticipates an “action-packed week” for macro markets, hinting at the return of volatility.

Miners’ Potential Influence Could Bitcoin miners be the silver lining in the looming cloud? A theory suggests that miners could propel Bitcoin’s price upward in anticipation of the April 2024 block subsidy halving, which will halve their reward per mined block.

James Straten, a researcher and data analyst at CryptoSlate, highlighted that Bitcoin’s hash rate is surging into uncharted territory. This bullish trend in hash rate growth leading up to the halving is reminiscent of what occurred before the 2020 halving.

Hash rate, an estimate of mining processing power, has not only reached new all-time highs, but also demonstrated upward adjustments even when BTC price performance has remained stagnant or decreased.

Bitcoin’s difficulty adjustment also hit one of its most substantial upward changes in 2023 last week, marking all-time highs.

In Conclusion Bitcoin enters the coming week surrounded by uncertainty. With historical patterns pointing to a potentially challenging September, and miners potentially gearing up for a bullish period, the market’s trajectory remains unclear. As macroeconomic developments and events play second fiddle to cryptocurrency dynamics, the week ahead holds a mix of anticipation and caution for market participants.

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