U.Today – the cryptocurrency with the largest market capitalization ended August down 8.73%, in line with expectations based on past trends.
In a recent tweet, Ali Martinez noted that while Bitcoin has fulfilled its historical scenario in August, similar expectations exist for September, which is usually considered a negative month for Bitcoin.
But Spot On Chain’s latest observations, shared in a Twitter thread, point to five reasons why this year could be different.
First, a negative August could support avoid a negative September. For the other reasons mentioned, the major selling pressures have subsided and long-term holders remain mighty. Fourth, Bitcoin ETFs could be a renewed buying force, and third, favorable interest rates, capital, and regulation could support boost the market in September.
Will Bitcoin Break the September Curse? Here Are Five Tips
Spot On Chain’s analysis begins with a historical observation: While it’s true that September usually means a decline, that’s not a given. Almost 43% of negative Augusts have been followed by positive Septembers. This year, with Bitcoin experiencing a negative August, there’s a chance the worst may be behind it, setting up a potential rebound.
Second, the selling pressure on Bitcoin has significantly decreased. Three major selling forces sold 170,917 BTC or $10.69 billion in the market in July and August, including the German government, which sold 49,859 BTC worth $3 billion in early July and no longer holds BTC. Mt Gox repaid 95,958 BTC in July and August and still holds 44,898 BTC worth $2.65 billion, or only a third of its initial holding. GenesisTrading distributed 24,068 BTC for repayment on August 2 and no longer holds BTC.
However, the US government still has 203,650 confiscated BTC worth $12 billion, and like the German government, this could be a large selling force. However, recent activity suggests narrow risk of a sell-off in the brief term.
In 2023 and 2024, the U.S. government transferred 35,516 BTC worth $1.48 billion to Coinbase (NASDAQ:) at a price of nearly $41,637, but overall the price reaction was faint as most of the selling was done via OTC, which had minimal impact on the market.
Long-term holders, who added 262,000 BTC in August, bringing their total holdings to 14.82 million BTC, or 75% of the total supply, remain another positive factor. Similarly, BTC ETFs could be a renewed buying force if the pattern of alternating positive and negative months continues.
Other potential call triggers include the likelihood of the Fed cutting interest rates in September, which could boost demand for risk assets like BTC or a Bitcoin ETF. FTX will return $16 billion to creditors in cash, not cryptocurrency, which could be reinjected into BTC and the broader market.
