In a recent video ominous predictions about Bitcoin’s performance in September have emerged from renowned cryptocurrency analyst Benjamin Cowen. Known for his data-driven approach to cryptocurrency analytics, Cowen shared his insights on Bitcoin’s historical performance in September and its potential trajectory for the current year.
Cowen acknowledged that September has traditionally been a challenging month for BTC, often characterized by negative price movements. He emphasized that while historical trends point to a red month for Bitcoin in September, there are no guarantees and a green September happens occasionally.
The analyst highlighted that Bitcoin has experienced six consecutive red Septembers from 2017 to 2022. The average return for Bitcoin in September has historically been around -6.6%, with a standard deviation contributing to the unpredictability of the cryptocurrency’s performance.
Investigate possible price drops
Cowen then dug into the potential price drop for Bitcoin in September. Given Bitcoin’s opening price of just under $26,000 for the month, a 7% drop would put its value at around $24,000. He further pointed out that in the year before the September halving, Bitcoin witnessed a 14% decline, potentially pushing the price to $22,000.
To bolster his argument, Cowen referenced a recent tweet in which he speculated that Bitcoin was likely to reach $23,000 in September. While emphasizing that this forecast is far from a guarantee, he underlined the seasonal pattern, downward momentum and recent monthly close below certain support levels as factors that make a dip to $23,000 plausible.
Additionally, Cowen discussed average returns across all years before the month’s halving, revealing a drop of around 17.7%, which could lead Bitcoin to trade around $21,500 if history repeats itself.
On August’s performance, Cowen noted that Bitcoin had already experienced a 10% decline. While the August long-term average is about 21%, the average of just the last two years before the halving (2015 and 2019) indicates a more modest average decline of -11% to -12%. This highlights that Bitcoin could follow a similar pattern in September, potentially softening the blow to around $24,000.
The current price of Bitcoin (BTC) is $25,813, with a price change of -0.99% over 24 hours. As the leading cryptocurrency, Bitcoin has a significant market capitalization of $502,654,681,515, securing its position as the number one cryptocurrency by market capitalization. In the past 24 hours, Bitcoin has experienced a trading volume of $17,603,174,408, making it the second most actively traded cryptocurrency by volume. This high trading volume indicates strong interest and activity within the Bitcoin market, which contributes to its liquidity.
Navigating the cyclical nature of Bitcoin
Cowen stressed that despite the uncertainty, Bitcoin’s seasonality and existing downside momentum make a test of the USD 23,000 level very likely in the near future, possibly in September or October.
Cowen reflected on the cyclical nature of Bitcoin’s price movements in a broader context, stating that it often alternates between bullish and bearish phases. He emphasized that during the years before the halving, Bitcoin tends to rise significantly during the first half and experience a decline in the second half. According to Cowen, this pattern is designed to “destroy” both bulls and bears before entering a period of sustained growth.
He also pointed out that while BTC may face challenges in the near term, altcoins could regain momentum once quantitative easing (QE) returns and cryptocurrency market sentiment improves.
In conclusion, Cowen warned his audience to remain vigilant in September, historically a month of red returns for Bitcoin. He urged caution, citing past data and market dynamics as indicators of a potentially challenging month ahead. While the future remains uncertain, Cowen’s data-driven analytics serves as a valuable resource for those navigating the turbulent waters of the cryptocurrency market. Investors and enthusiasts will no doubt be watching closely to see if Bitcoin’s performance over the coming weeks and months matches his predictions.
Featured image from Pixabay and chart from TradingView.com