Bitcoin (BTC) traded below $11,500 on Sep 25 as the largest cryptocurrency risked a fresh bearish move towards key support. The overall market mood stays gloomy, and the best reason for that is the “September effect,” a seasonal factor historically affecting BTC . US listed Bitcoin ETFs gained some flows but the picture is mixed.
According to SoSoValue data, spot Bitcoin ETFs saw inflows of $241 million on Wednesday, breaking a streak of two days of outflows. But those inflows were small compared with a larger recovery in mid-September, which followed a steep price decline in August.
With more inflows on the way, follow through selling would, in theory, put BTC on a path for recovery although sentiment in the near term suggests caution.
Source: SoSo Value
September has proved to be a tough month for BTC, historically. According to CoinGlass, September is Bitcoin’s worst month based on average monthly return (-3.24%). BTC has risen 3.17% so far this month and traders are wary as the month could still turn red for Bitcoin price.
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The historical behavior underscores BTC vulnerabilities going into the final days of September, leaving traders caution about an extended price downside.
Source: Coinglass
Analysts are mixing caution with optimism when it comes to Q4. More broadly, the fourth quarter of the year has in recent history proved more favorable for BTC, with less tight credit conditions.
Markets are pricing in two 25 basis point rate cuts in October and December that may lift investor morale. However, the next non-farm payrolls release could alter market mood and change that picture.
The price action around BTC during the past month has been more bearish than bullish. BTC fell by 3.19% in the subsequent four days, after failing to stay above $116K in Sept.
The cryptocurrency ended Monday below the 50-day Exponential Moving Average (EMA) at $113,762 and although it tried to rally Wednesday, it instead ran into EMA’s overhead barrier. By Thursday, BTC was trading at around $111,490.
Source: TradingView
If BTC further slides, it could test the $107,245 support. The Relative Strength Index (RSI) is sitting at 42 which suggests bearish momentum, and the Moving Average Convergence Divergence (MACD) indicator has fallen into a bearish crossover. These signals indicate that the downtrend may continue in the near term.
Nonetheless, if BTC closes above the 50-day EMA at $113,762, the next stop up could be the resistance level of $116,000. Traders will be looking keenly to see if BTC is able to break the resistance or whether it resumes moving lower.
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