Bitcoin has once again adopted a familiar pattern of subdued volatility, a trend we’ve witnessed in recent months. This tendency often paves the way for additional downturns, with a potential support at prices a bit lower.
Over the past 24 hours, bitcoin’s price has maintained relative stability, hovering at approximately $25,750. The digital money continues to stay below the $26,000 threshold, which has served as a resistance level for most of the previous month. Any gains resulting from a brief surge above $28,000 last week, following a favorable pro-bitcoin court ruling in the SEC-Grayscale case, have proven to be short-lived.
Hope for bitcoin ETFs has been a significant factor lifting market sentiment, particularly following applications by established financial giants like BlackRock and several others during the summer.
Related reading : ETF Filings Could Introduce Bitcoin To A $30 Trillion Market
However, the SEC is temporarily delaying these decisions, as revealed in Thursday’s filings, which indicate that rulings on several funds including those proposed by BlackRock and Invesco have been postponed until mid-October.
FxPro’s Senior Market Analyst Alex Kuptsikevich cites bitcoin’s 11% drop in August as it’s “worst performance since last November”:
Bitcoin ended August down 11% at $26K, its worst performance since last November and the second consecutive month of declines. Technically, the recent pullback has confirmed that BTC’s 200-day average is now acting as a resistance. According to the Fibonacci pattern, the potential downside target is the $21.3K area. However, a drop to $24.7K also looks like an impressive short-term target for the bears.
Historical data indicates a gloomier outlook.
September has traditionally been the most challenging month for Bitcoin, mirroring the Dow Jones Industrial Average and S&P 500’s struggles in the stock market. Bitcoin has experienced declines in each of the previous six Septembers, with an average drop of 6% in every September on record, as reported by Dow Jones Market Data.
The initial day of September trading has left much to be desired, even though there was a potential market-shifting event in the form of the U.S. jobs report for August.
Bitcoin’s responsiveness continues to be closely tied to the broader macroeconomic landscape. It’s particularly on the outlook for interest rates, which influences the demand for assets sensitive to market risk, such as stocks and bitcoin.
Price movements remained relatively muted following the release of the US jobs report. The report showed that the U.S. economy added 187,000 jobs in August, surpassing the anticipated 170,000. This higher-than-expected figure might bolster the case for another interest rate hike by the Federal Reserve later this month.
Nevertheless, this report also presents signs of a deceleration in the overall jobs picture, with unemployment having increased to 3.8%.
Current macroeconomic situation, as gloomy as it might seem, proves the case for the digital money. It highlights the need for a hard, scarce asset to be part of every investor’s portfolio in times of uncertainty.