Bitcoin Price Declines Near $57.5K, Continuing 10% Weekly Loss in Seasonally Bearish September
Bitcoin experienced a drop of close to 1.2%, reaching approximately $57,500, while other cryptocurrencies like solana and dogecoin faced losses of up to 5% during the Labor Day holiday in the United States.
Historical market analysis indicates a bearish trend for September, with some traders observing that bitcoin typically sees an average monthly decline of 6%.
BTC plummeted to nearly $57,500 on Monday, marking a seven-day decline of over 10%, with the wider crypto market following suit in its downward trajectory.
Over the past 24 hours, BTC saw a decrease of 1.2%, with major cryptocurrencies such as solana (SOL), BNB Chain’s BNB, xrp (XRP), and Cardano’s ADA slipping by as much as 3%. Dogecoin (DOGE) recorded a 5% loss, leading the decline among the top cryptocurrencies, while the CoinDesk 20 Index (CD20), which tracks the largest tokens, fell by 1.88%.
Exchange-traded funds (ETFs) in the U.S. that track BTC recorded total net outflows of $175 million on Friday, extending a four-day losing streak. Meanwhile, Ether (ETH) ETFs experienced no net inflows or outflows despite a trading volume of $173 million, as per data from SoSoValue. Traditional markets in the U.S. remained closed due to the Labor Day holiday.
Traders have noted that the decrease in BTC’s value aligns with the historically observed bearish seasonality in September. However, they also mentioned that potential interest rate cuts by the U.S. Federal Reserve could potentially disrupt this trend.
“September is a historically negative month for Bitcoin, with an average value depletion rate of 6.56%,” stated Innokenty Isers, founder of crypto exchange Paybis. He expressed optimism that if the Federal Reserve were to reduce interest rates in September, it could potentially alter bitcoin’s negative historical performance, as rate cuts typically result in increased US dollar circulation within the economy, thereby bolstering bitcoin’s outlook as a store of value.
Seasonality refers to the regular and predictable fluctuations that assets undergo throughout the calendar year. While these fluctuations may seem random, they can be attributed to various factors such as profit-taking around tax season in April and May, leading to drawdowns, and the bullish “Santa Claus” rally in December, indicating heightened demand.
Isers also mentioned that overall macroeconomic indicators, the adoption of spot Bitcoin ETFs, and a favorable hashrate could potentially make September a relatively more favorable month for BTC in this quarter.
