Bitcoin Price’s “Rektember” Struggles: What to Expect in the Weeks Ahead

Key Takeaways:

• Bitcoin’s September Performance: Historically, September is a challenging month for Bitcoin price, often yielding losses. Data shows an average downside of around 4.5%, making it a critical period for traders to watch.
• Current Market Sentiment: Bitcoin price began September near $57,000 with weak bullish momentum. Spot demand has been evident around $58,000, but low interest in derivatives markets suggests a cautious approach from traders, who are favoring short positions.
• Potential Price Movements: Analysts predict possible dips to $56,000 or even $54,000 before any relief rally. Some forecasts, however, remain optimistic, suggesting a rebound could push Bitcoin to $60,500 or even as high as $68,000 this month.
• Macro Influences: With U.S. markets quiet early in the month due to Labor Day and a lack of major economic data releases, the focus shifts to unemployment figures and the upcoming Federal Reserve meeting on interest rates, both of which could impact Bitcoin’s price.
• Long-Term Outlook: Despite short-term volatility, historical patterns and deep learning models suggest a potential recovery for Bitcoin. The Puell Multiple metric is approaching a buy zone, and some analysts believe a significant breakout could occur in late September or early October, aligning with post-halving trends.

As September kicks off, Bitcoin price finds itself in a familiar position—starting the month with a decline. Often referred to as “Rektember” in the crypto community, September has historically been a challenging month for Bitcoin. However, not every market outlook is bearish. Here are five key things to know about Bitcoin’s current state and what might come next.

BTC/USD Monthly Returns | Source: CoinGlass

1. BTC Price Struggles to Gain Momentum

Bitcoin price has entered September with a whimper rather than a bang. As of now, BTC price is trading around the $57,000 mark, with little bullish sentiment to support higher prices. Both the monthly and weekly closes have failed to inspire confidence, with Bitcoin price struggling to overcome the sell-side pressure that has been dominant in recent weeks.

BTC/USD | Source: TradingView

According to market analysis, the spot demand for Bitcoin price around the $58,000 level has been a critical area for buyers, but so far, this has not translated into significant upward momentum. Data from popular trader Skew highlights that while there has been some buyer interest at these levels, the overall market sentiment remains cautious, with derivatives markets showing little enthusiasm.

This lack of interest in derivatives suggests that funding rates are likely to remain negative or low for the foreseeable future, further dampening the prospects for a strong recovery. The current market positioning reflects a preference for short positions as a hedge, with little growth in market activity since the recent sell-off to $58,000.

2. Potential for Further Downside Before a Rebound

Some traders are predicting that Bitcoin price could dip even lower before any meaningful recovery occurs. The current bid support appears to be clustering around the $56,750 level, with some forecasts suggesting a push to $56,000 or even $54,000 before a bounce.

One trader, Madara, speculates that Bitcoin price might dip to $56,000 and sweep recent lows before making a move upward. He expects that if a bounce occurs after this dip, the price could rally to around $60,500, with a potential move to $65,000 thereafter.

Another trader, Captain Faibik, is slightly more optimistic, suggesting that a relief rally could push Bitcoin price as high as $68,000 this month. However, these predictions hinge on Bitcoin price’s ability to navigate the current market turbulence and attract renewed buyer interest.

3. Macro Conditions Remain Calm Ahead of Labor Day

The start of September coincides with the Labor Day holiday in the United States, leading to a quieter week in terms of macroeconomic data. With US markets closed on September 2, traders are likely to focus on the upcoming US jobs report as a key indicator of market direction.

The Federal Reserve’s next meeting on September 18 will be crucial, with markets currently pricing in a minimal 0.25% rate cut. This is a shift from expectations just a month ago, which had anticipated a 0.5% cut due to economic concerns stemming from Japan.

Despite the calm start to the month, trading resource The Kobeissi Letter suggests that elevated volatility and favorable trading conditions could emerge later in the week, especially as markets digest the August jobs data. The S&P 500, for instance, has seen a strong recovery since early August, adding an average of $250 billion in value each trading day—a trend that could influence broader market sentiment.

4. September’s Historical Performance Raises Concerns

Historically, September has not been kind to Bitcoin price. Data from CoinGlass reveals that the ninth month of the year typically results in losses for BTC/USD, with an average downside of around 4.5%. This pattern follows a disappointing August, where Bitcoin ended the month 8.6% lower, setting the stage for what could be a challenging September.

However, some analysts remain hopeful that Bitcoin price could break this trend. Popular trader and analyst Rekt Capital noted that Bitcoin price tends to experience a breakout approximately 150-160 days after a halving event, which would place the next breakout in late September 2024.

BTC/USD Halving Comparison Chart | Source: Rekt Capital

Even in the best-case scenario, Rekt Capital suggests that Bitcoin price’s gains in September may be modest, with a potential 6% increase. The real opportunity, he argues, could come in October, a month historically known for strong performance, with average gains of nearly 23%.

5. Puell Multiple Suggests a Buying Opportunity May Be Near

Another indicator providing some optimism is the Puell Multiple, a metric that compares the daily value of Bitcoin mined to its 365-day moving average. This metric is useful in identifying potential buy and sell zones, and currently, it is moving toward its green “buy” zone, characterized by a reading of 0.5 or less.

According to analysis from CryptoQuant, a drop below the 0.6 threshold often signals an ideal time for Dollar-Cost Averaging (DCA) strategies, where investors buy at regular intervals regardless of price. Conversely, a breakout above the 0.8 level is typically associated with bullish market behavior, potentially leading to new all-time highs.

At present, the Puell Multiple is fluctuating between these critical levels, indicating that a market entry at current prices could be a reasonable strategy for long-term investors.

Conclusion: A Volatile September with Potential Opportunities

As September unfolds, Bitcoin price faces a familiar set of challenges, with historical data suggesting a difficult month ahead. However, not all is doom and gloom. While short-term volatility is expected, there are signs that Bitcoin price could find support and possibly stage a recovery, particularly as October approaches. For now, cautious optimism and strategic positioning may be the best approach for navigating what could be a classic ‘Rektember.’

Source: CoinTelegraph