Bitcoin has been on a downward trajectory since briefly touching $65,000 on August 26th, hitting a two-week low of $57,116 early this morning.

Is the September Curse Real for Bitcoin?

As September approaches, investors are growing increasingly concerned about the recurrence of the so-called "September Curse." A closer look at Bitcoin's monthly returns over the past 11 years (2013-2023) reveals a concerning trend: Bitcoin has experienced a decline in 8 out of 11 Septembers, equating to a staggering 73% drop probability. Furthermore, September has historically been the month with the highest average decline, reaching a substantial 4.78%.

This pattern isn't unique to Bitcoin. The Nasdaq Composite, when analyzed over the past decade, has also exhibited a downward trend in 8 out of 10 Septembers. Given the correlation between cryptocurrencies and the broader stock market, Bitcoin may be susceptible to similar seasonal effects.

Factors Influencing September's Performance

While historical data points to a compelling "September Curse," it's essential to consider other factors that could influence the market this month. Here's a breakdown of potential bullish and bearish indicators:

Bearish Factors:

• Mt. Gox overhang: Arkham Intelligence data reveals that Mt. Gox still holds over 40,000 BTC, despite returning a significant portion. Continued repayments could exert downward pressure on prices.

• US government holdings: The US government recently transferred nearly $600 million worth of Silk Road-related Bitcoin. The uncertainty around the purpose of these funds, whether for holding or sale, introduces additional market volatility.

• Short-term holder resistance: Analysts have identified a significant resistance level around $63,250 for Bitcoin's short-term holders. Until Bitcoin can reclaim this level as support, downward pressure may persist.

  
  

Bullish Factors:

• Fed rate cut expectations: The anticipation of a Federal Reserve rate cut in September is strong, particularly if this week's non-farm payroll data aligns with expectations.

• Pre-election rally: Historically, the S&P 500 has shown a tendency to rally in the three months leading up to a US presidential election. This could potentially boost Bitcoin's performance.

• Waning miner selling pressure: CryptoQuant data suggests that Bitcoin miner selling pressure is decreasing. If this trend continues and is absorbed by the market, it could fuel an upward price movement.

Disclaimer: None of the information contained here constitutes an offer (or solicitation of an offer) to buy or sell any currency, product or financial instrument, to make any investment, or to participate in any particular trading strategy.