Beware Of Crypto Markets Until October: 3 Key Reasons

As a seasoned crypto investor with over five years of experience in this volatile market, I find myself cautiously optimistic about the current state of the crypto markets. Having weathered numerous market crashes and rallies, I’ve learned to appreciate the importance of understanding historical trends and seasonality.


Today’s cryptocurrency markets have seen a generally optimistic trend, as Bitcoin (BTC) has increased nearly 1%. This bullish sentiment from yesterday is likely to persist, potentially leading to another surge in the crypto market. However, if Bitcoin’s price struggles to maintain above a crucial support level, it might trigger a sudden downturn or crash in the crypto market.

3 Reasons for Crypto Market Caution:

    Historical data shows Bitcoin’s seasonality will add a headwind, preventing crypto markets from rallying massively this month and next.
    From a mid-to-short-term perspective, Bitcoin price needs to hold the four-hour support level of $54,676 to sustain the ongoing recovery rally.  
    From a lower time frame, BTC could trigger a minor rally to $62,200. 

Crypto Markets Crash or Rally: What’s Next?

For more than five months now, the crypto market has shown a steady trend rather than experiencing a crash or rally. This stable pattern might be due to unpredictable economic circumstances, worries about a potential recession, and ongoing geopolitical issues, among other factors.

While all of the above factors are true and have affected Bitcoin and the broader crypto markets, one thing that goes unnoticed is the seasonality and its effect on the markets. Historical data for the past 13 years shows that the third quarter has the worst performance, with an average return of 2.78%.

Beware Of Crypto Markets Until October: 3 Key Reasons

To date, the monthly returns chart indicates that Bitcoin’s price increased by 3.10% in July and has decreased by -7.98% so far in August. If current trends persist and past patterns recur, it is unlikely that BTC prices will see a significant surge. However, this quarter presents an opportunity for long-term investors and institutions to buy Bitcoin at a reduced price. As the price of Bitcoin moves, so too will the broader cryptocurrency market. Therefore, it’s crucial for investors to recognize the seasonal fluctuations in Bitcoin’s price.

Beware Of Crypto Markets Until October: 3 Key Reasons

Analyzing the performance of months reveals that September has been the least profitable on average, with a return of about -5% over the past 13 years. Consequently, it might be wise for investors to brace themselves for potential declines in the crypto market during September, should history follow a similar pattern.

Beware Of Crypto Markets Until October: 3 Key Reasons

Based on the analysis of both monthly and quarterly price fluctuations, it seems that Bitcoin’s price isn’t showing any clear signals of initiating a bullish trend at this point.

Bitcoin Price Mid-to-short-term Outlook Forecasts Bullishness

Looking at a four-hour Bitcoin price graph, it’s clear that a period of five months without significant price movement has established a range between approximately $62,200 to $72,200. A test of this range’s lower limit on August 8 was met with rejection, triggering a 10% drop. This decline created a new low point on the chart, indicating a potential recovery. So far, Bitcoin has formed two higher highs and three higher lows, suggesting that its recovery rally is in full force. As long as this support level holds for Bitcoin, the overall crypto market may maintain a neutral-to-bullish perspective. If the $54,676 support on the four-hour chart were to break, however, it could indicate a resumption of the downward trend.

Beware Of Crypto Markets Until October: 3 Key Reasons

Looking ahead, the immediate prediction for Bitcoin’s price remains optimistic due to its formation of an inverted head-and-shoulders pattern. This bullish outlook suggests a potential 5% surge, reaching approximately $62,917, once it surpasses the current resistance level at $59,837.

Beware Of Crypto Markets Until October: 3 Key Reasons

In summary, the cryptocurrency market forecast for the immediate and medium periods is positive, but its long-term prediction through September remains unclear. Thus, it would be wise for investors to postpone engaging in long or short-term trading strategies until the fourth quarter of the year.

Read More

2024-08-17 14:10