As September 2024 comes in, Bitcoin investors are closely monitoring whether the crypto will break its historical pattern of underperformance this month.
September has often been challenging for Bitcoin, with an average negative return of 4.78% and a 72.7% likelihood of closing in the red. Despite this, several factors indicate that Bitcoin’s price could experience a different trajectory this year.
According to a recent report by Spot On Chain, there are perks why September 2024 might not follow the usual trend.
For instance, a look at Bitcoin’s historical performance reveals that September’s negative reputation isn’t entirely consistent. While the month is known for its challenges, there have been instances where Bitcoin defied the trend.
Specifically, in the past seven years, when August ended on a negative note, September continued the downward trend in only four of those years or 57.1% of the time. Conversely, in three of those years, September reversed course, delivering positive returns 42.9% of the time.
Selling Pressures May Have Subdued
Spot On Chain continues to mention that one of the primary factors potentially stabilizing Bitcoin’s price in September is the clearing of significant selling pressures observed in previous months.
Notably, the German government, which sold nearly 50,000 BTC between June and July 2024, has now largely exhausted its holdings, reducing this source of market strain.
Similarly, Mt. Gox has distributed most of its repayment in Bitcoin, with only a small portion remaining. Genesis Trading’s debt repayments, which caused market disturbances in August, have also largely concluded, leaving less room for similar disruptions in the upcoming month.
Together, these developments suggest that the intense selling pressures seen in recent months may not persist in September.
Long-Term Holders Exhibit Strong Retention
Another factor that could positively influence Bitcoin’s performance is the robust position of long-term holders. Data indicates that long-term holders have increased their supply by 262,000 BTC over the past month, reaching a total of 14.82 million BTC.
This strong accumulation reflects confidence among long-term holders, who have shown little interest in selling despite market fluctuations.
Additionally, a significant portion of Bitcoin’s circulating supply remains dormant in top anonymous wallets, further indicating a reluctance to sell. This behavior among long-term holders could stabilize Bitcoin’s price in the coming weeks.
Renewed Optimism for Bitcoin ETFs?
Further, per Spot On Chain, in September 2024, Bitcoin ETFs might experience a modest positive net inflow, building on the observed pattern of alternating between positive and negative months.
After a slight negative flow in August, historical trends suggest a potential rebound, with estimates for net inflows ranging between $500 million and $1,500 million.
However, it’s important to note that this prediction remains speculative, as market conditions can shift rapidly, impacting the actual outcome.
Favorable Socioeconomic Events on the Horizon
September 2024 may also benefit from several upcoming socioeconomic events that could support Bitcoin’s price. Anticipated interest rate cuts by the Federal Reserve, expected to reduce rates by 25 basis points, could drive investors toward cryptocurrencies as traditional investments become less attractive.
Additionally, FTX’s planned repayment of $16 billion in cash to creditors could result in a reinvestment surge into the crypto market.
Moreover, the evolving U.S. political landscape, with increasing bipartisan support for favorable crypto regulations, could further boost investor confidence.
According to Spot On Chain, these factors combined suggest a potentially more optimistic outlook for Bitcoin in September, diverging from its usual pattern of decline.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
