Bitcoin Price Warning: Brace for Drop to $50,000 as Crypto Enters Toughest Month
Bitcoin’s recent trading performance may continue to face challenges for the next month as traders await clarity on U.S. interest rate adjustments and the upcoming presidential election. The leading cryptocurrency had a tough time in August, with Bitcoin experiencing a 10.25% decline, marking its worst month since April. Similarly, ether saw a 23.66% drop, its third consecutive monthly decline and the worst month since June 2022. This disparity in performance has led to a prevailing sentiment in the market that while Bitcoin has seen some success due to ETFs in 2024, other cryptocurrencies have not mirrored Bitcoin’s rally to record highs and are encountering difficulties.
Rob Ginsberg, a chart analyst at Wolfe Research, commented on the current state of the crypto market, stating that it is not a favorable scenario overall. He noted that Bitcoin remains within a descending trading range, gradually declining from its peak in March. Ginsberg emphasized the importance of acknowledging this trend and suggested a possible revisit to the lower end of the range around the low $50,000 region in the weeks ahead. He highlighted that since reaching its peak in March, Bitcoin has been on a downward trend, forming lower highs and lower lows. Ginsberg maintained a bearish outlook on Bitcoin’s short- to mid-term price direction until a breakout or a more gradual reversal occurs.
Bitcoin’s price was already on a downward trajectory during the recent holiday weekend trading, approaching the $58,000 mark. Historically, September has been a challenging month for Bitcoin, with the coin finishing lower in eight out of the last 11 Septembers. On average, September has seen the largest loss of 4.8% for Bitcoin, according to CoinGlass. Last year marked the end of a six-year losing streak for Bitcoin in September. Since April, Bitcoin has been range-bound between $50,000 and $70,000, and this range is expected to persist for at least another month.
Supply-related issues have contributed to the challenges faced by Bitcoin in August, although many of these concerns have been resolved or mitigated. Alex Thorn, the head of research at Galaxy Digital, indicated that various supply overhangs in Bitcoin have been addressed, such as the recovery of most remaining U.S. government Bitcoin supply from theft, the completion of sales by Germany, and the distribution of Bitcoins from the Mt. Gox estate and other bankruptcies. Thorn expressed optimism about Bitcoin’s supply situation going forward.
Looking ahead, Thorn suggested that Bitcoin could remain range-bound until November, with the uncertainty surrounding the U.S. presidential election weighing heavily on investor sentiment. He mentioned that a Trump victory could serve as a positive catalyst, while the potential impact of a Harris victory is expected to be minimal. John Todaro, an analyst at Needham, highlighted the lack of clarity on election outcomes and rate cut expectations, with the market already factoring in significant rate cuts. The Federal Reserve’s upcoming policy meeting on September 17-18 may provide further insights into the future direction of Bitcoin’s price.
