Selling pressure on Bitcoin and the broader crypto market continues to mount further with the Bitcoin price dropping by another 1.62% in the last 24 hours and moving all the way to $57,500. With this move, BTC has extended its weekly losses to more than 10.5%. September has been historically bearish for Bitcoin and the broader crypto market, starting the month on the expected lines.
Bitcoin Price Drops As Capital Flows Move to Stablecoins
After facing rejection at $65,000 last week, the Bitcoin price has been sliding down as the capital flows for BTC have dropped below stablecoins, which hints at a major caution moving ahead. Investors moving money into stablecoins shows a drop in confidence and uncertainty for Bitcoin in the near term. Thus, they might prefer to buy the BTC dips in the future. On the other hand, the stablecoin marketcap has also surged to its all-time high reaching closer to $170 billion.
Crypto analyst Ali Martinez has observed a major decline in the exchange-related on-chain activity the Exchange Volume Momentum indicator. He noted that this sustained drop in on-chain activity signals a drop in investor interest in Bitcoin along with a corresponding decrease in network usage.
Over the last quarter and more, the Bitcoin price has attempted several V-shaped recoveries after the dips in May, July, and August. However, the market’s underlying structure and fundamentals have gradually weakened.
On the other hand, each BTC downturn has been deeper, and the subsequent recoveries are less robust. Thus, the end-of-month data for August shows that we could be approaching a critical tipping point in September, resulting in a decline in demand.
BTC Loses Critical Support Levels
Over the last decade, September has been historically the month of major consolidation or downward movement with the average downside anywhere between 5-10%.
Popular crypto analyst Rekt Capital highlighted that Bitcoin has been just hours from its weekly candle close and trading under the crucial support levels of $58,540. Closing the week under these levels will open the gates for further downside. The analyst added that for the Bitcoin price to maintain the uptrend, it must give a closing above $59,000, which seems unlikely considering the current price levels.
Bitcoin is mere hours away from its Weekly Candle Close
Bitcoin needs to Weekly Close above ~$58450 to protect the Channel Bottom and secure it as support on this retest
Price is at this support right now
Ideal close would even be ~$59000 to get BTC above the blue… https://t.co/70b979m3JM pic.twitter.com/nO4JoeVQAa
— Rekt Capital (@rektcapital) September 1, 2024
Also, the release of the US jobs data ahead of this week would be crucial to determine the decision on Fed rate cuts in September.
Currently, BTC remains in the strong re-accumulation range. Rekt Capital stated that historically, the BTC price has broken out 150-160 days after the Bitcoin halving. Thus, the breakout won’t happen until the end of September if we consider a similar timeline this time as well.
Bhushan Akolkar
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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