Currently trading at just under $59,000, the $BTC price has a big month ahead. September is traditionally a bad month for Bitcoin, and so it remains to be seen if the first Federal Reserve rate cut, due on 18 September, can add some upward impetus to the price.
September - the worst month for Bitcoin returns
Coinglass produces records of the monthly Bitcoin returns since 2013, and September has proved to be the worst month, with an average of -4.39%. The nearest worst month to this is June, with an average return of -0.35%. All other months traditionally give positive returns, with November recording an average of +46.81%, which is far and away the month with the best returns.
Spot Bitcoin ETF negative flows
Bitcoin is already down in one area, as the Spot Bitcoin ETFs recorded a negative flow for each of the last four days of August, which somewhat dampened the effect of all the positive inflow days prior to this.
Fed rate cuts positive for Bitcoin?
However, looming large on the 18 September is the Federal Reserve FOMC meeting, where Chairman Powell is expected to start cutting rates by 25 basis points, with a 30% chance that this might even be a 50 basis points rate cut.
With the resulting extra liquidity in the system, and the promise of more rate cuts coming by the end of the year, this would seem to be a great environment within which Bitcoin can flourish. That said, Arthur Hayes, former CEO of BitMEX, posted on X that in his view money markets will transfer their funds into the Reverse Repo Program (RRP), which offers a higher yield than short-term treasuries. Hayes thinks that this can counter the expected boost from rate cuts - taking this liquidity away from risk assets like Bitcoin.
$BTC back above major support
Source: TradingView
Looking at the $BTC price on the short term time frame, it can be seen that after falling out of the upward sloping channel on Sunday, the price has since regained the bottom of the channel, and is now battling to return inside, briefly touching $59,800 earlier on Tuesday.
The downward trend line has been broken to the upside, and this has supplied the momentum to get $BTC this far. Also, importantly, the price is back above the major horizontal support at $58,000.
A battle of weekly candles
Source: TradingView
In the more macro weekly time frame, it can be observed that the $BTC price is trying to battle against last week’s bearish candle close, where this red candle ‘enveloped’ the previous green weekly candle. The 0.382 fibonacci level at $51,000 is a possibility should the price fall down.
Countering this, the huge wick down in early August, caused by the Japan carry trade crash, was bought up fast by the market, and could still be providing upside momentum to the price.
At the bottom of the chart, the indicators for the Stochastic RSI are still battling for supremacy. If the blue (fast) indicator can close the week above the red (slow) indicator, and both indicators head upwards, this would provide a lot of upside price momentum.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
