As Bitcoin investors navigate through the typically tough month of September, New York Digital Investment Group (NYDIG) head of research Greg Cipolaro highlights potential opportunities despite the challenges.
In a September 10th market update, Cipolaro acknowledged that Bitcoin faces a “seasonal slog” this month, noting that historical data shows September is often a rough period for the cryptocurrency, with an average loss of 5.9% over the past 13 years.
Finding Opportunities in a Tough Month
Despite the historical downturns, Cipolaro remains optimistic, suggesting that September might still present some unique opportunities. Investors should focus on macroeconomic factors rather than Bitcoin-specific events for potential catalysts.
Key macroeconomic events, such as inflation data, unemployment rates, and GDP growth, along with monetary policy decisions by the Federal Open Market Committee (FOMC), could influence Bitcoin’s performance. The most significant upcoming event is the FOMC meeting on September 18th, where interest rate decisions will be made.
Fed Chair Jerome Powell’s recent remarks indicating that it might be time for the Federal Reserve to cut interest rates have heightened expectations. A 25 basis point cut could support Bitcoin’s long-term price appreciation by alleviating concerns about a slowing US economy and potential recession. Conversely, a more substantial rate cut could spark recession fears, potentially leading to a Bitcoin retracement, with some analysts predicting a 20% drop.
Currently, traders see a 27% chance of a 50 basis point cut, according to CME’s FedWatch tool, although 10x Research suggests that the prevailing consensus leans towards more aggressive cuts.
Looking Ahead: Promising Q4 2024
While September poses challenges, Cipolaro points to a potentially strong Q4, with October and November historically being robust months for Bitcoin. NYDIG data shows that Bitcoin has typically gained 16.1% in October and 40.6% in November.
Other analysts, including the pseudonymous trader Titan of Crypto, also view the final quarter of 2024 as a significant opportunity for price gains, with potential for a major breakout.
Historical and technical patterns support the notion that Bitcoin could reach six figures as we approach 2025. Cipolaro believes that recent volatility may just be part of the growing pains before a potential bull run.
As we head into Q4, the upcoming US presidential election in November remains a critical factor. With former President Donald Trump seen as a crypto-friendly candidate and much less known about Vice President Kamala Harris’s stance on digital assets, the election introduces an additional layer of uncertainty and potential volatility. Cipolaro concludes that while the outcome is uncertain, Bitcoin’s performance in the meantime will likely be influenced by broader market conditions.
