Bitcoin, the world’s most valuable cryptocurrency, has been facing significant downward pressure in recent weeks, leading many analysts to predict a gloomy future for the coin. In this article, we will analyze the current performance of Bitcoin and compare it to historical trends to assess the potential trajectory of the cryptocurrency in September.
Bitcoin is currently trading at around $25,860, experiencing a decline after surging nearly 60% from November 2022 lows. The drop was exacerbated by the collapse of FTX and the bankruptcy of centralized finance lending platforms like BlockFi. In August, Bitcoin retraced from its July 2023 peaks when it reached around $31,800. By the end of August, the coin was down approximately 20% from its July highs, causing concern among investors.
Benjamin Cowen, an analyst and founder of Into The Cryptoverse, has conducted a detailed analysis of Bitcoin’s performance in previous halving cycles. He notes that in both pre-halving years, the coin experienced a contraction in prices throughout September. The average return during this period was -17.29% before the halving occurred. Based on this historical data, Cowen predicts that Bitcoin will likely slump to $21,400 by the end of September.
Potential Upside amid Bearishness
While the outlook for Bitcoin in September appears bearish, some optimism can be found by considering its performance during previous halvings. In the last two halving cycles, Bitcoin’s average return in September was -5.66%, indicating a potential decline to around $24,400 by the end of the month. Although this suggests a further drop, it is slightly less severe than the projections based on the average return before halvings.
Bullish Sentiment for the Medium to Long Term
Despite the recent downturn, supporters of Bitcoin maintain a bullish stance for the medium to long term. The slight recovery in the second half of August and the first week of September has provided some hope for bulls. However, it is important to note that Bitcoin is still facing significant challenges and is not yet out of the woods in terms of price action.
For a potential recovery, Bitcoin supporters are eagerly awaiting the approval of a spot Bitcoin Exchange-Traded Fund (ETF) by the Securities and Exchange Commission (SEC). This derivative product would enable institutions to gain exposure to Bitcoin, potentially increasing demand and driving the price upwards. However, until such developments occur, the cryptocurrency market remains uncertain.
Based on the analysis of Bitcoin’s performance and historical trends, it appears that the cryptocurrency will likely maintain a downside trajectory in September. The average return before halvings suggests a potential drop to $21,400, while considering the performance during previous halvings indicates a decline to around $24,400. However, it is important to consider the volatile nature of the cryptocurrency market and the potential for unforeseen events to impact Bitcoin’s trajectory.