- September may bring more losses to Bitcoin, according to Kraken's report.
- In the long-run, BTC/USD is poised for hefty gains.
Bitcoin has settled in a tight range limited by $10,000 on the downside and $10,500 on the upside. At the time of writing, BTC/USD is changing hands at $10,140, unchanged since the start of the day. While the first digital currency is having a rest after a volatile August, the cryptocurrency experts try to figure out its chances for September.
The fall comes in September
According to the Bitcoin's volatility report, published by the cryptocurrency exchange Kraken, September is historically a bearish market for the leading digital asset. The experts analyzed the trends and found out that BTC tends to demonstrate negative momentum in September before launching a new aggressive bullish impulse.
Given bitcoin's underperformance this year relative to monthly averages, one could expect bitcoin to fair worse than September's average return of -7% in what is bitcoin's worst month on record.
They also point out that Bitcoin's volatility may slow down in September. Historically, the 9-year average and median volatility in September is the lowest among all other months.
A famous forex and futures trader Peter Brandt shares the pessimistic view. In the recent tweet, he pointed out to the bearish setup on a daily chart that may result in a new sell-off.
Will this time be different?
The current on-chain metrics, including stablecoins' inflow to the top cryptocurrency exchange accounts, implies that the market is getting ready to buy Bitcoin on the dip. Typically, investors accumulate stabelcoins on their exchange wallets as they are looking for the opportunity to increase their exposure. Get our latest article for more details on how Bitcoin whales are going to buy the dip.
More importantly, the S2F forecasting model developed and popularized by Twitter analyst PlanB, implies that BTC is on the verge of a massive rally due to the delayed halving effect. The historical data supports this view as it took Bitcoin from nine to ten months to hit a new all-time high after the first and the second halvings. Now, S2F predicts that BTC/USD will hit $18,000 by the end of October and catapult to $32 000 by the end of the year.
BTC/USD: The technical picture
As we have previously mentioned, if the price goes below the channel support between $10,000 and $9,800, BTC may retest the next critical area of interest around $9,000. This barrier is reinforced by a combination of weekly SMA50 and daily SMA200, and it may serve as a starting point for the next strong rally towards $12,000 that serves as a pivotal resistance and separates BTC from moving to $13,800-$14,000.
BTC/USD weekly chart
On a monthly chart, Bitcoin's August candle creates an evening start. This candlestick formation usually implies that the asset is on the verge of the bearish reversal; however, we will still need to see a confirmation in the form of the bearish September close. Anyway, the long-term trend remains bullish bias as long as it stays above the upside trendline (currently, at $7,100). This area will serve as an ultimate backstop that separates BTC correction from a new bearish trend.
BTC/USD monthly chart
To conclude: While the short-term Bitcoin's technical picture remains uncertain as long as it stays within the current narrow range, the coin has the potential to extend the decline towards at least $9,000 before another strong bullish trend is started. From the long-term perspective, Bitcoin is still poised for a rally, while a breakthrough above $12,000-$12,500 will signal that the bearish correction is over, and the coin is ready to shoot to new highs.
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