Bitcoin’s September Outlook: A Historical Look at the Red Month for BTC

Bitcoin traders made approximately $4.251 billion in profits during August 2024, contributing to the downward pressure on BTC. Transactions by Bitcoin whales involving $100,000 or more reached their lowest level in nearly four years. Despite this, BTC is deemed undervalued when looking at both the 7-day and 30-day timeframes. Historically, September has not been a favorable month for Bitcoin returns, potentially leading to extended losses if the trend persists.

Bitcoin’s on-chain metrics present a mixed picture. While there is support for gains in Bitcoin, historical data indicates negative returns for traders during September. This cycle is viewed as distinct from previous ones due to the approval of Bitcoin Spot ETFs this year and the increasing institutional interest in the cryptocurrency.

On-chain metrics play a crucial role in the potential trajectory of Bitcoin. Data from Santiment highlights that crypto traders realized significant gains in August 2024. The Network Realized Profit/Loss (NPL) metric for Bitcoin saw notable positive spikes. Conversely, large-scale profit-taking could drive BTC prices lower, although the decline in whale transactions involving substantial sums suggests that significant profits have not yet been cashed out.

Moreover, the dwindling supply of Bitcoin on exchanges, as reported by Santiment, indicates a lower volume of BTC in exchange wallets, leaving room for potential price appreciation. A positive sign for Bitcoin’s price is the Market Value to Realized Value (MVRV) metric, signaling that BTC is currently undervalued on both short-term and medium-term timeframes.

In terms of price action, Bitcoin is hovering near the $60,000 mark, with the potential to find support at $49,000 before initiating a recovery phase. The Moving Average Convergence Divergence (MACD) momentum indicator suggests underlying negative momentum in Bitcoin’s price, with the possibility of a weekly candlestick closure above $60,000 leading to a push towards the $65,000 resistance level.

Overall, while Bitcoin faces challenges in the short term, such as historical negative returns in September, the presence of supportive on-chain metrics and institutional interest could pave the way for potential gains in the cryptocurrency.