Will Bitcoin Break September’s Historical Jinx? What the Latest Data and Trends Suggest for 2024
The flagship cryptocurrency by market capitalization, Bitcoin, posted a loss of 8.73% month to August end in line with historical records and an unconvincing performance for the month. The negative movement fits with the general August narrative of Bitcoin and usually means a fairly bearish September will follow.
But new analysis from Spot on Chain suggests that all may not be lost for Bitcoin in September 2024, identifying five critical drivers that could fuel a deviation from the historical path.
1. Historically, all signs point to a comeback.
What I found most interesting in Spot on Chain’s analysis was a review of where we’ve been. Although September is historically a bearish month for Bitcoin, that does not always apply. In reality, nearly 43% of negative Augusts in the past were followed by positive Septembers. Based on what Bitcoin did in August of 2024, it is possible that the market has seen its worst in terms of this pullback, and we may just be setting up for some kind of rip into September.
2. Reduction in Selling Pressure
Another important factor is that the major selling pressure from Bitcoin whales has dropped significantly as well. Over July and August, the German government unloaded 1400 Bitcoins (BTC); Mt. Gox has been sending its leftovers out by truckload; Genesis Trading added some sales of their own, resulting in a total net loss of theoretical assets sold over this summer equal to 1709 thousand BTC (~107bn USD).
We also saw the German government sell off all of its Bitcoin, and resorts from Mt. Gox to Genesis Trading dump significant quantities as well. But new data may indicate that we’re now less likely to see a major sell down in the near term, with even the updated net-holding and days destroyed metrics for whale addresses potentially flagging reduced risk of large-scale government selling as well.
The vast majority of U.S. policy Bitcoin liquidity sales were on the OTC market in 2023 and 2024, as it would then have worked less intensively for a better price signal at this moment cheap resulted that indeed buy on bitcoin his way to The dismal stock returned, and now he goes again?
3. Strength of Long-Term Holders
Nevertheless, long-term holders are remaining strong and have demonstrated faith in the future of Bitcoin, hinting towards bullish signs appearing into the market for bitcoin to bounce back. Long-term holders increased their position by 262,000 BTC in August of 2024 to reach the holding level of 14.82 million BTC (or ~75% total supply).
The extent to which long-term investors lean into this kind of strong holding pattern further also points to a continuation in the trend, making massive sell-offs less likely and reflecting an almost unwavering faith in Bitcoin over time.
4. Eight Institutions Could Ready Fresh $500k-$1m Foray into Bitcoin ETFs
Bitcoin ETFs could also be a positive catalyst for the market. On a historical basis, months where August showed net outflows have been followed by healthy buying during the month of September due to people alternating between profit and loss taking. The potential inflow of funds towards Bitcoin ETFs could easily play the role as a powerful purchasing power behind, once again supporting Bitcoin price throughout this month.
5. Moreover, these solutions are also being helped by favored economic and regulatory environments.
Meanwhile, more general economic and regulatory circumstances could contribute to achieving a better performance of Bitcoin in September. As Ciara Sun of FX hedge fund Binance told Coin telegraph, “Bitcoin’s recent drop had less to do with analysis of traditional market indicators and more to do with factors unique according to the class asset.”
Conversely, while she did say there is room for a Federal Reserve interest rate cut, which could be beneficial in boosting demand from traders whose main focus may be fixed-income assets such as equities or some type. Furthermore, FTX returning $16 billion in cash to creditors rather than crypto might see some of this capital reinvested into Bitcoin and the broader market.
Ultimately, while September has historically been tested for Bitcoin in the past, there are several reasons that 2024 could face a different fate. We have reduced selling pressure, according to Coin Shares and Grayscale, strong long-term holders of Bitcoin that will likely avoid panic-selling (on top of having less incentive to sell with the proposed legislation), potential.
ETF inflows on derivatives later this month, which might push investment demand for cryptos higher-up in anticipation by shareholders/investors, as well as positive economic conditions provided there are no significant unknown macro tail risks, all of which suggest that September could be one where Bitcoin finally reverses course from its usual history.
