U.Today – the largest cryptocurrency by market cap, closed the month of August down 8.73%, as expected based on past trends.
In a recent tweet, Ali Martinez noted that while Bitcoin delivered on its historical narrative in August, there are similar expectations for September, which is generally considered a negative month for Bitcoin.
However, recent information from Spot On Chain, shared in a tweet thread, suggests five reasons why this year could be different.
First, a negative August may help avoid a negative September. In other reasons cited, major selling pressures have disappeared and long-term holders remain strong. Fourth, Bitcoin ETFs may be a renewed buying force, and lastly, favorable interest rates, capital, and regulations could help boost the market in September.
Will Bitcoin Overcome the September Curse? Five Signs
Spot On Chain’s analysis begins with a historical observation: while it is true that September is typically a month of decline, it is not a given. Nearly 43% of negative Augusts have been followed by a positive September. This year, with Bitcoin experiencing a negative August, there is a chance that the worst is behind us, setting up for a potential rally.
Second, selling pressure has substantially eased for Bitcoin. Three major selling forces dumped 170,917 BTC or $10.69 billion into the market in July and August, including the German government, which sold 49,859 BTC worth $3 billion in early July and no longer holds BTC. Mt Gox refunded 95,958 BTC in July and August and still holds 44,898 BTC worth $2.65 billion, or just a third of the initial holding. GenesisTrading distributed 24,068 BTC for refund on August 2 and no longer holds BTC.
However, the US government still has 203,650 confiscated BTC worth $12 billion in its possession, and as in the case of the German government, this may be a major selling force. However, recent actions suggest a limited risk of a near-term sell-off.
In 2023 and 2024, the US government moved 35,516 BTC worth $1.48 billion to Coinbase (NASDAQ:) for nearly $41,637, but overall there were only weak price reactions because most of the sales were done via OTC with minimal impact on the market.
Another positive factor is long-term holders, who increased their supply by 262,000 BTC in August, bringing their total holdings to 14.82 million BTC, or 75% of the total supply. Similarly, BTC ETFs may be a renewed buying force, if the pattern of alternating between positive and negative months continues.
Other potential buying drivers include the likelihood of the Federal Reserve cutting interest rates in September, which could boost demand for risky assets like BTC or Bitcoin ETFs. FTX will repay $16 billion to creditors in cash, not cryptocurrency, which can be reinjected into BTC and the broader market.
This article was originally published on U.Today
