Markets

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

Published

3 months 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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Altcoin

Bitcoin Cash eyes 18% rally

Published

4 hours ago

November 22, 2024

admin

Bitcoin Cash (BCH) added nearly 35% to its value in the past month and rallied 12% on Nov. 21. Bitcoin’s (BTC) observed a rally to $98,384 early on Nov. 21, with BCH and other top cryptocurrencies tagging along for the ride.

An analysis of on-chain and technical indicators and data from the derivatives market shows that BCH could extend gains and retest its mid-April 2024 peak of $569.10.

Bitcoin hits all-time high, fork from 2017 ignites hope for traders

Bitcoin hit a record high of $98,384 on Nov. 21, a key milestone as the cryptocurrency eyes a run to the $100,000 target. BTC was forked in 2017, creating a spin-off or alternative, Bitcoin Cash.

BCH hit a peak of $1,650 in May 2021. Since April 2024, BCH has been consolidating with no clear trend formation.

BCH price rallied nearly 30% since Nov. 15, on-chain indicators show that further rally is likely in the Bitcoin spin-off token.

Bitcoin Cash’s active addresses have climbed consistently since August 2024. Santiment data shows an uptrend in active addresses, meaning BCH traders have sustained demand for the token, supporting a bullish thesis for the cryptocurrency.

The ratio of daily on-chain transaction volume in profit to loss exceeds 2, is 2.141 on Thursday. BCH traded on-chain noted twice as many profitable transactions on the day, as the ones where losses were incurred. This is another key metric that paints a bullish picture for the token forked from Bitcoin.

Binance funding rate is positive since Nov. 10. In the past eleven days, traders have been optimistic about gains in BCH price, according to Santiment data.

Chart of the week: Bitcoin Cash eyes double-digit rally, bullish indicators point to gains in BCH - 1 — BCH price vs. active addresses, binance funding rate, ratio of daily on-chain transaction volume in profit to loss | Source: Santiment

The network realized profit/loss metric identifies the net gain or loss of all traders who traded the token within a 24 hour period. NPL metric for Bitcoin Cash shows traders have been taking profits on their holdings, small positive spikes on the daily price chart represent NPL.

Investors need to keep their eyes peeled for significant movements in NPL, large positive spikes imply heavy profit-taking activities that could increase selling pressure across exchange platforms.

84.48% of Bitcoin Cash’s supply is currently profitable, as of Nov. 21. This metric helps traders consider the likelihood of high profit-taking or exits from existing BCH holders, to time an entry/ exit in spot market trades.

Chart of the week: Bitcoin Cash eyes double-digit rally, bullish indicators point to gains in BCH - 2 — BCH price vs. network realized profit/loss, percent of total supply in profit | Source: Santiment

Derivatives traders are bullish on BCH

Derivatives market data from Coinglass shows a 33% increase in open interest in Bitcoin Cash. Open interest represents the total number of active contracts that haven’t been settled, representing demand for the BCH token among derivatives traders.

Derivatives trade volume climbed 613% in the same timeframe, to $2.35 billion. Across exchanges, Binance and OKX, the long/short ratio is above 1, closer to 2, meaning traders remain bullish on BCH and expect prices to rally.

Chart of the week: Bitcoin Cash eyes double-digit rally, bullish indicators point to gains in BCH - 3 — Bitcoin Cash derivatives data analysis | Source: Coinglass

BCH futures open interest chart shows a steady increase in the metric, alongside BCH price gain since November 5, 2024. Open interest climbed from $190.74 million to $254.87 million between November 5 and 21.

Chart of the week: Bitcoin Cash eyes double-digit rally, bullish indicators point to gains in BCH - 4 — BCH futures open interest | Source: Coinglass

Technical indicators show BCH could gain 18%

The BCH/USDT daily price chart on Tradingview.com shows that the token remains within the consolidation. The token is stuck within a range from $272.70 to $568.20. BCH could attempt to break past the upper boundary of the range, a daily candlestick close above $568.20 could confirm the bullish breakout.

The April 2024 high of $719.50 is the next major resistance for BCH and the second key level is at $805.80, a key level from May 2021.

The relative strength index reads 64, well below the “overvalued” zone above 70. RSI supports a bullish thesis for BCH. Another key momentum indicator, moving average convergence divergence flashes green histogram bars above the neutral line. This means BCH price trend has an underlying positive momentum.

The awesome oscillator is in agreement with the findings of RSI and MACD, all three technical indicators point at likelihood of gains.

Chart of the week: Bitcoin Cash eyes double-digit rally, bullish indicators point to gains in BCH - 5 — BCH/USDT daily price chart | Source: Crypto.news

A failure to close above the upper boundary of the range could invalidate the bullish thesis. BCH could find support at the midpoint of the range at $419.90 and the 50-day exponential moving average at $388.50.

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

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Bitcoin Magazine Pro

The Bitcoin Pi Cycle Top Indicator: How to Accurately Time Market Cycle Peaks

Published

7 hours ago

November 22, 2024

admin

The Bitcoin Pi Cycle Top Indicator has gained legendary status in the Bitcoin community for its uncanny accuracy in identifying market cycle peaks. Historically, it has timed every single Bitcoin cycle high with remarkable precision—often within just three days. Could it work its magic again this cycle? Let’s dive deeper into how it works and its significance in navigating Bitcoin’s market cycles.

*View the Pi Cycle Top Indicator Chart Here.*

What is the Pi Cycle Top Indicator?

The Pi Cycle Top Indicator is a tool designed to identify Bitcoin’s market cycle tops. Created by Philip Swift, Managing Director of Bitcoin Magazine Pro in April 2019, this indicator uses a combination of two moving averages to forecast cycle highs:

111-Day Moving Average (111DMA): Represents the shorter-term price trend.
350-Day Moving Average x 2 (350DMA x 2): A multiple of the 350DMA, which captures longer-term trends.

When the 111DMA rises sharply and crosses above the 350DMA x 2, it historically coincides with Bitcoin’s market cycle peak.

The Mathematics Behind the Name

Interestingly, the ratio of 350 to 111 equals approximately 3.153—remarkably close to Pi (3.142). This mathematical quirk gives the indicator its name and highlights the cyclical nature of Bitcoin’s price action over time.

Why Has It Been So Accurate?

The Pi Cycle Top Indicator has been effective in predicting the peaks of Bitcoin’s three most recent market cycles. Its ability to pinpoint the absolute tops reflects Bitcoin’s historically predictable cycles during its adoption growth phase. The indicator essentially captures the point where the market becomes overheated, as reflected by the steep rise of the 111DMA surpassing the 350DMA x 2.

How Can Investors Use This Indicator?

For investors, the Pi Cycle Top Indicator serves as a warning sign that the market may be approaching unsustainable levels. Historically, when the indicator flashes, it has been advantageous to sell Bitcoin near the top of the market cycle. This makes it a valuable tool for those seeking to maximize gains and minimize losses.

However, as Bitcoin matures and integrates further into the global financial system—bolstered by developments like Bitcoin ETFs and institutional adoption—the effectiveness of this indicator may diminish. It remains most relevant during Bitcoin’s early adoption phase.

A Glimpse Into the Future

The big question now is: will the Pi Cycle Top Indicator remain accurate in this cycle? With Bitcoin entering a new era of adoption and market dynamics, its cyclical patterns may evolve. Yet, this tool has proven its worth repeatedly over Bitcoin’s first 15 years, offering investors a reliable gauge of market tops.

Final Thoughts

The Pi Cycle Top Indicator is a testament to Bitcoin’s cyclical nature and the power of mathematical models in understanding its price behavior. While its past accuracy has been unparalleled, only time will tell if it can once again predict Bitcoin’s next market cycle peak. For now, it remains an indispensable tool for those navigating the thrilling highs and lows of Bitcoin.

Explore the full chart and stay informed.

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$100

Bitcoin Nears $100,000 As Trump Council Expected To Implement BTC Reserve

Published

15 hours ago

November 22, 2024

admin

What an enormous day it has been today.

Gary Gensler officially announced that he is stepping down from his position as Chairman of the Securities and Exchange Commission (SEC), and minutes later, Reuters reported that Donald Trump’s “crypto council” is expected to “establish Trump’s promised bitcoin reserve.” A bitcoin reserve, that would see the United States purchase 200,000 bitcoin per year, for five years until it has bought 1,000,000 bitcoin.

Right after both of those, Bitcoin continued its upward momentum and broke $99,000, with $100,000 feeling like it can happen at any second now.

It is hard to contain my bullishness thinking about the United States purchasing 200,000 BTC per year. They essentially have to compete with everyone else in the world who is also accumulating bitcoin and attempting to front run them. There are only 21 million bitcoin and that is a LOT of demand.

To put this into context, so far this year the US spot bitcoin ETFs have accumulated a combined total of over 1 million BTC. At the time of launch the price was ~$44,000 and now bitcoin is practically at $100,000. And that’s all ETFs combined. Imagine what will happen when just one entity wants to buy a total of 1 million coins, having to compete with everyone else accumulating large amounts as well?

I mean MicroStrategy literally just completed another $3 BILLION raise to buy more bitcoin, and will continue raising until it purchases $42 billion more in bitcoin. The United States are most likely going to be purchasing their coins (if this legislation is officially signed into law) at very high prices. The demand is insane and only rising in the foreseeable future.

With two months left to go until Trump officially takes office, it remains to be seen if this bill becomes law, but at the moment things are looking really good. As Senator Cynthia Lummis stated, “This is our Louisiana Purchase moment!” and would be an absolutely historic moment for Bitcoin, Bitcoiners, and the future financial dominance of the United States of America.

This is the solution.
This is the answer.
This is our Louisiana Purchase moment!#Bitcoin2024 pic.twitter.com/RNEiLaB16U
— Senator Cynthia Lummis (@SenLummis) July 27, 2024