After Bitcoin's huge rally, in Q1, the second part of the year is noticeably weaker for it. Admittedly, the cryptocurrency is trading almost 20% above the local lows of early August, when the price momentarily dived below $50,000, but failed to break out permanently above the $65,000 level. A weaker dollar and uncertainty around the future momentum of the US economy are not causing euphoria in the market; nor has the prospect of a 100 bp Fed rate cut, later this year, brought a new wave of fresh demand to the market and to ETFs.
- It seems that investors are still weighing risks, while seasonality patterns suggest that we may have to wait until October for a stronger crypto market rebound, as September has historically performed quite poorly for Bitcoin, with an average annual negative return over the past 12 years.
- Also on Wall Street, September is known as a month of correction, and with this in mind, larger capital seems to have missed the upward momentum for Bitcoin. ETFs, on the other hand, are behaving steadily and steadily accumulating BTC, while the price of the cryptocurrency is 'only' about 25% below its historical peak. So-called 'altcoins' are doing much less well, and a sizable portion of them have erased most of the gains from the period
- Bitcoin virtually 'ignored' Donald Trump's renewed advantage in the US election, which occurred after Robert Kennedy Jr.'s supported him and Kamala Harris' interview on CNN television, which caused some media controversy.
Seasonality points to a weak September, ahead of a historically upward October, November and December. Will history repeat itself? Potential upward impulses include: Trump's electoral advantage and US rate cuts. Source: Bloomberg Finance L.P., Macrobond , XTB Research
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The end of August brought a relatively sizable sell-off in US ETFs. On August 31, net outflows reached $175 million; however, it is worth pointing out that these outflows are largely in 'expensive' ETFs, while the largest Fidelity and BlackRock are holding on very tightly; they have sold just a per mile of the accumulated Bitcoin. Source: Bloomberg Finance L.P. , XTB Research
Bitcoin (D1 interval)
Bitcoin is trading in a potential bullish flag pattern, and a breakout of the price above $64,000 could provide confirmation of this formation, opening the way to $70,000 and historical highs. At the same time, the SMA100 average has settled below the SMA200 - a situation that has happened only once in the last 2 years, after which the SMA100 average 'unwound' upwards, thanks to the sudden price increase. Previously, in early 2022, this situation occurred regularly, when the price of BTC fell from around $60,000 to $15,000, at which time the SMA100 was continuously below the 200-session simple moving average. However, retest of August lows at $50,000 may pressure another downward price impuls.
Source: xStation5
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