As we advance deeper into September, BTC looks somewhat vulnerable to the market outlooks that consider the plunge down to $40,000 in the near future to be possible. Despite its past performances, technical, historical, and macroeconomic factors mean that BTC could soon enter a bear market.
Historical Trends: September Slump
Mining, or the process of creating new bitcoins, is often viewed as difficult during September. BTC is commonly in the red during this month: out of the past 10 years, there were only two years, 2018 and 2013, when BTC has registered positive returns in this month. It is worth mentioning the deterministic pattern as in four out of the past five Septembers, Bitcoin posted negative returns making it clearly the worst time for BTC. These historical trends have led others to worry that Bitcoin cannot sustain its current price levels as it continues to be stuck trading at around $50,000.
Macroeconomic Pressures: The Fed and the Dollar
However, there are other macroeconomic factors that justify the bearish outlook aside from historical ones. Some of the factors that are pushing down Bitcoin include the US monetary policies and a rising US dollar index. There are indications that the global inflation regime has continued unabated, and with the current trend of increasing interest rates, the fundamentals of safety have drawn many investors. The common understanding of the dollar movement is that as it rises, risky assets such as Bitcoin feel the pinch. Pundits are calling for bearish trends to push Bitcoin to $40,000, owing to these macro factors if the Federal Reserve is relentless.
Technical Indicators: The Bearish Signals
In terms of the ‘technical analysis’ which is like a mechanical identification of the state of the markets, the situation for Bitcoin isn’t looking too good either. The cryptocurrency has stagnated above the indicated levels and a breakout of these levels might result in a steep downward move. Also worth mentioning is the Stock-to-Flow (S2F) model which has been rather accurate in determining Bitcoin rates previously but is currently rather off. Though the model forecasts that Bitcoin could reach $100,000 before the year ends, the current market outlook and chart analysis signal a short-term bearish trend.
The Role of Altcoins: A Shift in Market Dynamics
Another consideration is the ascendancy of other cryptocurrencies such as Ethereum, Cardano, and Solana. These have been trending much higher than Bitcoin in terms of investors’ attention and fund inflows in the last several months. Therefore, Bitcoin has lost its market share, continuing the process of its weakening. If this continues, there could be more selling pressure on Bitcoin which might increase its rate of decline to $40,000.
Final Thoughts
In conclusion, while Bitcoin has proven its resilience in the past, several factors suggest that a price plunge to $40,000 is a distinct possibility in the coming weeks. Historical trends, macroeconomic pressures, technical indicators, and the rising dominance of altcoins all point to a challenging period ahead for BTC. Investors should be cautious and closely monitor the market for further developments, as the situation could evolve rapidly.
As always, it’s essential to approach cryptocurrency investments with caution, especially during periods of heightened volatility. While the potential for significant gains exists, so too does the risk of substantial losses. Keep an eye on the key levels of $50,000 and $40,000, as these will likely be critical in determining Bitcoin’s direction in the near term.
Read Also : Bloomberg’s Bold Bitcoin Prediction: $81K Soon?
Disclaimer !! The information provided by CryptopianNews is for educational and informational purposes only. It should not be considered financial or investment advice. Cryptocurrency markets are highly volatile and speculative, and investing in them carries inherent risks. Readers are advised to conduct their own research and consult with a qualified financial advisor before making any investment decisions.
Riz-A is a seasoned blockchain content writer with a passion for demystifying complex concepts and making cutting-edge technology accessible to a broader audience. With years of experience in the blockchain and cryptocurrency space, Riz-A has a proven track record of creating engaging, informative, and thought-provoking content.