Bitcoin (BTC) price performance in August saw losses of 8.6% for the largest cryptocurrency, exacerbating bearish sentiment in the market since reaching all-time highs of $73.7k in March this year. Since then, BTC has been unable to consolidate above key levels.

However, it may turn out that this is not the end of the downward trend, as the latest analysis by research firm CryptoQuant suggests that the downward trend will continue in September.

A Tough September for Bitcoin

According to CryptoQuant, September’s outlook seems equally challenging for BTC. Their latest analysis highlights that August’s results, marked by the so-called “BOJ (Bank of Japan) crash” in early August, which sent the token to a six-month low of $49,000, has prevented BTC from rebounding above $65,000 since then.

In addition, historical data indicates that September is usually bearish month for Bitcoin, with six of the last seven Septembers ending in the red, with an average loss of around 4.5%. The firm believes that if this trend continues, BTC price could fall to around $55,000 by the end of the month.

Despite the bearish outlook, CryptoQuant believes that the situation may not be as bad as it seems. They predict that Bitcoin will find “strong support” near the $54,000 level, a price point from which it successfully rebounded in July before surging to $70,000.

Long-Term Confidence Index

The company warned to keep an eye on this week’s events in the coming days economic datain particular the September 5 Unemployment Benefit Claims report and the September 6 Nonfarm Payroll (NFP) data.

However, CryptoQuant suggests that expectations regarding the impact of these macroeconomic indicators on cryptocurrency prices are circumscribed, noting that their influence has diminished in recent weeks.

What’s more, volatility curve for Bitcoin is expected to rise as short-term volatility declines. Interestingly, there is evidence of continued bullish sentiment in the medium term, despite recent pullbacks, as investors enter long call options for both Bitcoin and Ethereum (ETH).

For example, a significant purchase of a 200x call option on Bitcoin expiring in March 2025 with a strike price of $120,000 increased its open interest to 2,100 contracts. This means that despite the current market conditionsThere is still a powerful belief among some investors that Bitcoin will escalate in value in the long term.

At the time of writing, the largest cryptocurrency on the market is trading at $58,400, down 0.2% in the last 24 hours and 5.5% in the last 30 days. Despite these ongoing price corrections, CoinGecko data shows that BTC is still up 126% year to date, making it one of the best performing tokens.

Featured image from DALL-E, chart from TradingView.com