Bull market to Bitcoin: Wake me up when September ends

bitcoin, Bull market to Bitcoin: Wake me up when September ends
Bitcoin bull sleeping, Image by digitalexpeditiongroup from Pixabay 
  • September has not been a good month for Bitcoin as far as gains are concerned
  • Especially for all the four years from 2017 to 2020
  • The next FOMC meeting from September 21-22 remains a crucial event worth looking out for

Bitcoin markets had to endure hell in September from 2017-2020. That’s right. Historically BTC has always registered losses in September. In September 2017, BTC experienced a drop from the $4,700 price level to $3,200. It was $7500 to $6000 in September 2018, near $10,200 to $7,500 in September 2019, and from $11,500 to $10,000 during September 2020.

Twitter-based crypto commentator, Fomocap noted in a tweet Thursday, July 1st, “Wall Street likes the color red in September. The First month after vacation.”, he said in a tweet and posted four consecutive charts of Bitcoin trimming gains in all September(s) from 2017 to 2020.

Fomocap mentioned US stocks to have undergone “bearish Septembers” as well. But the same is only true for the years 2018, 2019, and 2020, when the benchmark S&P 500 index did lose a few points and go pitter-patter.

bitcoin, Bull market to Bitcoin: Wake me up when September ends
S&P 500 Daily Chart Shows September Blues For Stocks, Source: SPX on TradingView.com

Interestingly during the discussed timeline (2017-2020), the US dollar has always posted gains, except in 2018. The US Dollar Index or DXY that measures the greenback’s strength against major fiat currencies has always been on an uptrend during September 2017, 2019, 2020.

Also Read: Bitcoin tumbles as stocks, treasury yields rise amid sky-high CPI, PCE data

bitcoin, Bull market to Bitcoin: Wake me up when September ends

Bitcoin, Stocks Lost; USD Gained

Bullish sentiment for Bitcoin markets took a breather during September 2017-2020. And while that happened, investors rushed to seek safe havens in cash and cash-based asset markets. So what’s the explanation behind this? BTC and USD, for the most significant part of their trading history, have behaved as negatively correlated assets.

Crypto investors primarily like to think of the digital asset class as independent from other traditional asset markets. But unfortunately, that’s not the truth. Bitcoin trades in fiat currency pairs across the world, with most of the volume coming from greenbacks. Therefore, USD market trends affect BTC prices. It was visible from the shifting stance of investors as they quickly sold their Bitcoin positions to enter new ones in the dollar markets, post the Fed’s announcement of interest rate hikes in 2023.

Also Read: Bitcoin sentiment remains gloomy amid surging demand for Fed reverse repos

FOMC Meeting In September

The Federal Open Reserve Committee’s (FOMC) meeting this month was to give investors clarity on how it wants to deal with the scenario of surging inflation. In September, it will convene to further discuss its monetary policy tightening moves and tapering in bond purchases.

Bitcoin markets could again face setbacks if any developments favor the rise of the US dollar’s strength. Historically, the third quarter, in general, has not ended well for the top cryptocurrency. Data shows BTC reporting adverse movements in Q3 in all years except 2017, 2018, and 2020.

Also Read: Bitcoin Q2 2021 analysis, will Q3 be any better?

If the Fed sharpens its hawkish tone, then Bitcoin could be in for a rough ride, and a potential bull market will only like to “be awakened” after September. But bulls are an optimistic lot and will remain so. One such BTC bull is Konstantin Anissimov, Executive Director of the cryptocurrency exchange CEX.IO. According to him, this is just the lull before another liftoff. He says:

The current Bitcoin price of $33,421 is currently trading at a 48% cut from its all-time high (ATH) above $64,000. There are expectations that Bitcoin price will survive the extended correction from this ATH to retest new price highs. Bitcoin has a near-term projection of $50,000 and a longer-term projection of $75,000.

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