Markets

Bitcoin Usually Suffers in September—But ‘Uptober’ Is Right Around the Corner

Published

4 weeks ago

September 8, 2024

September has been historically a difficult month for U.S. stocks. And when it comes to the Bitcoin market, the so-called “September Effect” could be just as prevalent—and the performance of the price of BTC this first week lends credence to the theory.

The Wall Street phenomenon has been well documented for nearly a century. Since 1929, the S&P 500 has declined in September 55% of the time, according to Open Markets, “by far the most out of any month, and the only individual month that has declined at least 50% of the time over the last 94 years.”

The analysis cites traders’ vacation schedules and financial firms’ fiscal calendars as potential factors.

Bitcoin’s track record is comparatively short. However, the market has experienced noticeable weakness during the first month of the fall. Since 2013, Bitcoin’s price has declined in September eight times, according to CoinGlass data.

The asset’s price has started this month with a more than 8% slide, outpacing an average drop of 5% over the past decade. September is one of only two months to average losses since 2013, with June the only other negative month with -0.35% average price movement during that span. September is by far Bitcoin’s worst month over the last decade, on average.

Even though Bitcoin has exited September green only three times since 2013, Jake Ostrovskis, an OTC trader at the market maker Wintermute, told Decrypt that the red trend is far from gospel.

“Whilst the market likes to focus on the ‘September Effect’ given its historical performance, the small sample size makes it difficult to use as a leading indicator,” he said, pointing out that Bitcoin returned nearly 4% last September.

Ostrovskis pointed to several other factors driving Bitcoin’s price action in the short term that arguably hold more importance. He said that liquidity trends, macroeconomic conditions, and the crypto market’s overall sentiment are better gauges to watch than any calendar date.

When looking at average returns, it’s important to consider outliers, Grayscale’s managing director of research Zach Pandl told Decrypt.

For example, Bitcoin’s average return of 46% in November is heavily influenced by gains in 2013, when the asset’s price pushed 450% higher. Conversely, he said a few rough years for the S&P 500 in the 1930s have contributed to the September Effect in equities.

“Bitcoin’s price was up slightly last September, and October has historically had the highest average returns,” Pandl said. “We would therefore expect only the most impatient traders to position for any September Effect, and for most investors to focus on Bitcoin’s improving fundamentals, like upcoming Fed rate cuts and growing institutional adoption.”

Most economists view the September Effect as an inexplicable anomaly with little relevance, according to Investopedia. That’s partly because it challenges the efficient market hypothesis, which holds that an asset’s secondary market price will always reflect all available information.

Still, Bitcoin’s weakness in September has often been followed by gains. Since 2013, Bitcoin’s average drop of 5% in September has been followed by a 22% gain in October and 46% jump in November. During the crypto market bull run of 2021, the trend was referred to as “Uptober.”

Edited by Ryan Ozawa and Andrew Hayward

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cryptocurrency

Top cryptocurrencies to watch this week

Published

2 hours ago

October 6, 2024

admin

The global crypto market cap ended last week with a 7% drop, losing $160 billion as it closed at $2.15 trillion.

While Bitcoin (BTC) influenced the broader market, several altcoins charted their own paths, benefiting from unique developments within their ecosystems.

Here are some of these cryptocurrencies to keep an eye on this week, following their diverse price movements last week:

HMSTR collapses 18%

Hamster Kombat (HMSTR) saw a bearish week, dropping 18% to $0.004714. Its worst day came on Oct. 1 when it fell 13.94% amid a broader market decline on the back of geopolitical tensions.

HMSTR, SUI, FTT: Top cryptocurrencies to watch this week - 1 — HMSTR 4H chart – Oct. 6 | Source: crypto.news

Last week’s bearishness built on a downtrend HMSTR has faced since its airdrop on Sept. 26. However, the four-hour chart shows some signs of recovery, with the RSI sloping upward, now at 42.82.

For the DMI, the +DI is steady at 17.46, signaling slight buyer momentum. However, the -DI at 23.07 slopes downward, indicating weakening selling pressure. The ADX is at 22.68 and trending downward, as the current trend loses strength.

These figures suggest a possible recovery if buying momentum continues, with bulls possibly targeting $0.0051. However, the downtrend may persist if buyers do not pick up pace this week.

SUI demonstrates resilience

Sui (SUI) showed resilience despite broader market volatility, dropping only 0.3%. On Oct. 1, amid market turmoil, SUI dipped just 0.97%.

However, it saw a sharper 10.38% decline on Oct. 3, its largest intraday crash in three months.

HMSTR, SUI, FTT: Top cryptocurrencies to watch this week - 2 — SUI 1D chart – Oct. 6 | Source: crypto.news

SUI appears to be forming a bull pennant following its uptrend in September. Currently, the Bollinger Bands indicate the upper band at $1.97, which acts as resistance, and the 20-day MA at $1.62 provides immediate support.

With SUI trading below the upper band, the price could stabilize above the $1.62 support.

Investors should monitor for a bounce between $1.62 and $1.97, with a breakout above the resistance likely signaling bullish momentum for the week.

FTT bucks the trend

FTX Token (FTT) defied market trends last week, gaining 22% while most assets declined.

On Oct. 1, FTT rose by 13.89%, followed by a 21.53% surge on Oct. 4 and another 9.86% the next day.

HMSTR, SUI, FTT: Top cryptocurrencies to watch this week - 3 — FTT 1D chart – Oct. 6 | Source: crypto.news

Amid this uptrend, the Williams Percent Range stands at -32.59, signaling that FTT is near overbought territory but still has room for further gains.

As it witnesses a 9% retracement this new week, bulls need to defend the Pivot support at $2.01 to prevent a slip into bearish territories. Below this, the next support rests at $1.33, marking lows last seen in two weeks.

Should FTT recover from the latest correction, market participants should watch for a break above the resistance level at $2.68, which continues the bullish momentum.

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Bitcoin

Whales didn’t sell Bitcoin at $62k, on-chain data shows

Published

5 hours ago

October 6, 2024

admin

Bitcoin faces yet another correction after surpassing the $62,000 mark on Oct. 2. However, data shows that whales haven’t taken part in the latest selloff.

Bitcoin (BTC) consolidated around the $60,000 zone between Oct. 1 and 4 as the geopolitical tension between Iran and Israel heated up.

Right after the U.S. jobs report, the flagship cryptocurrency reached a local high of $62,370 on Oct. 5 as the broader crypto market witnessed bullish momentum.

Whales didn’t sell Bitcoin at $62k, on-chain data shows - 1 — BTC price – Oct. 6 | Source: crypto.news

Bitcoin declined by 0.2% in the past 24 hours and is trading at $61,950 at the time of writing. Its daily trading volume plunged by 53% and is currently hovering at $12.2 billion.

According to data provided by IntoTheBlock, large Bitcoin holders recorded a net inflow of 205 BTC on Oct. 5 as the outflows remained neutral. The on-chain indicator shows that whales didn’t sell Bitcoin as its price surpassed the $62,000 mark.

Whales didn’t sell Bitcoin at $62k, on-chain data shows - 2 — BTC whale net flows – Oct. 6 | Source: IntoTheBlock

Meanwhile, Bitcoin’s whale transaction volume decreased by 48% on Oct. 5 — falling from $48 billion to $25 billion worth of BTC. Lower trading and transaction volumes usually hint at price consolidations and lower volatility.

Data from ITB shows that Bitcoin registered a net outflow of $153 million from centralized exchanges over the past week. Increased exchange outflows suggest accumulation as the bullish expectations for October rise.

It’s important to note that macroeconomic events and geopolitical tension can suddenly change the direction of financial markets, including crypto.

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