Bitcoin price forecast for september

3 Eylül 2024

Today’s market analysis on behalf of Rania Gule Senior Market Analyst at XS.com

Bitcoin Price Forecast for September: Between Potential Gains and Historical

As September begins, Bitcoin is trading today, Tuesday, at $59,164. Historically, this month has been challenging for the cryptocurrency market, raising questions about Bitcoin’s (BTC) future under the current conditions. Bitcoin has recently seen significant gains, supported by increased institutional demand and the approval of Bitcoin exchange-traded funds (ETFs). However, history shows substantial challenges for the cryptocurrency in this so-called “red month” in the digital market.

In my view, while Bitcoin’s current gains are supported by forecasts, September has typically been a poor-performing month for cryptocurrencies. Historically, this month has provided negative returns for traders, adding a layer of caution to current analyses. However, the current circumstances differ from previous years, as instant Bitcoin ETFs were approved this year, leading to increased institutional demand for the digital currency, which could make 2024 different.

Market data indicates that cryptocurrency traders realized gains of $4.251 billion in August 2024, reflecting a significant positive increase in the Net Profit/Loss (NPL) metric for Bitcoin. I believe this rise reflects an improvement in traders’ financial conditions, but widespread profit-taking could cause short-term price volatility. Additionally, the whale transaction metric shows a decrease in large transfers (over $100,000) to its lowest level in nearly four years. This suggests that whales may be holding onto their coins and have not yet realized their desired profits.

On the other hand, the supply of Bitcoin on exchanges has dropped to its lowest level since December 2018. In my view, this decrease in exchange supply means that the amount of Bitcoin in exchange wallets is shrinking, indicating potential for future gains. Generally, a lower supply on exchanges is considered a positive sign for asset prices, as it may lead to price increases when supply diminishes.

Looking at the Market Value to Realized Value (MVRV) ratio, Bitcoin is undervalued in both the 7-day and 30-day timeframes. This suggests that the current price of Bitcoin may be below its true value, enhancing the likelihood of future gains.

However, Bitcoin has recently experienced a slight recovery after dropping 11% last week and closing below $57,500. I believe this drop was driven by outflows from U.S. Bitcoin ETFs, which recorded outflows of $279.4 million. Additionally, a whale deposited a large amount of Bitcoin on Binance, contributing to decreased investor interest and activity on Coinbase. These factors suggest that the current recovery may be short-lived, especially at the beginning of a historically challenging month for the markets.

Finally, cryptocurrency investment products faced a setback last week, with net outflows totalling $305 million. Bitcoin ETFs were the most affected, recording outflows of $319 million. In my view, these outflows may be due to Bitcoin’s sensitivity to interest rate cuts, aligning with the recent drop in the coin’s price to below $59,000 on Friday.

Overall, while some metrics support the potential for Bitcoin gains currently, historical factors and recent events present challenges for Bitcoin’s price in September. Continued institutional capital flows and ETFs may support Bitcoin’s price above the key support level of $60,000. However, investors should closely monitor market developments during this historically difficult month before making any long-term investment decisions.

 

Zaid Barem / YMM