Column by Alexander Mayer – Bitcoin: This is what the worst-case scenario for September looks like • news • onvista

Seasonally, September is the most difficult month for Bitcoin. Calculated based on average performance, it is the only month with average losses since 2013 (the year since which usable trading data in relevant quantities for Bitcoin has existed), alongside June (-0.35 percent), with a loss of 4.9 percent. Calculated based on the somewhat more meaningful median, August fared even worse with a loss of eight percent (September: -5.88 percent). But while August has some clear outliers on the upside, September has reliably proven to be a weak month for performance.

The fourth quarter of each year also presents itself with impressive reliability from a seasonal perspective. Except in a second year after a halving year (the point in time within the Bitcoin price cycles found so far when a bear market has played out), October has always initiated the next phase of an uptrend for Bitcoin and the fourth quarter has seen the most significant price gains to date.

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Purely in terms of seasonality, the current price performance fits perfectly into the picture of an overarching Bitcoin cycle. The traditionally weak summer phase with a corresponding finale in the months of August to September has played out so far. If the seasonality continues to behave similarly to past price cycles, then there is a lot to suggest a trend reversal and a return to bullish territory by the start of the fourth quarter in October at the latest.

The fourth quarter could catch many off guard

The fundamentals speak strongly in favor of this. While fears of a recession are growing again in the markets and weaker economic data are now pointing somewhat more in this direction, it should not be ignored that we are likely to move into the next phase of monetary easing by the Federal Reserve from September 18th, while the US economy continues to grow and inflation is well above two percent.

What will the Fed do if a recession really breaks out? Moreover, this will not be an emergency rate cut in crisis mode (at least as of today), as was usually the case in past interest rate cuts, but rather a controlled transition. Markets like security, not uncertainty.

At the same time, the US government's fiscal policy remains loose. This combination of loose fiscal and monetary policy improves liquidity conditions in the markets and provides further scope for the bull run in stocks and crypto assets, even if the current correction phase may signal otherwise. The recession question will undoubtedly remain in focus in 2025 and the last word on this is unlikely to have been spoken yet. But at least for the fourth quarter of 2024, the market could be caught on the wrong foot and the rally in the overall market since the end of 2023 could surprisingly revive.

Looking at the Bitcoin chart

Since reaching a new all-time high in March, Bitcoin has been in a consolidation movement for over six months, drawing lower highs and lower lows. The $60,000 mark has long held its ground as technical chart support, but recently the price has fallen significantly below it. The zone between $57,000 and $60,000, which functioned as resistance around the double top in the last bull market, has established itself as an important new support zone in the last six months.

Source: Trading View

With the transition in September, the Bitcoin price slipped below again and has to fight to maintain the long-term momentum for this bull run. The 50-week trend at a level of $53,000 and the level around the $48,000 mark are now in focus as central chart support. On the one hand, this level represents the current point of the uptrend that has existed since the formation of the bear market bottom in November 2022. On the other hand, it marks the central breakout level from February 2024, at which the resistance from March 2022 was broken and the first attack on new all-time highs in this bull cycle could be launched.

If September again causes significant price weakness, then in my view this would be the decisive chart technical level that must be maintained in order to confirm that this bull run will continue. If the price falls below this level on a weekly basis, then some fundamental questions must be asked. From a seasonal and cyclical perspective, the consolidation since April makes sense. It corresponds to the usual period of weakness in the summer, as well as the price weakness that has always occurred over several months after a halving, as rebalancing in the Bitcoin mining sector leads to increased selling pressure.

Chart-wise, the long-term movement looks like a bull flag and points to a breakout to the upside. In terms of timeframe, there is a lot of evidence for a breakout from the range in October, both seasonally and in terms of fundamentals. September should therefore provide some crucial clues for the further direction of this Bitcoin price cycle.

Think about it!

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