Any hope that investors had regarding the outlook for the crypto industry in August quickly faded in just a few short days. With barely a week into this month, crypto experts were already predicting a tough month ahead. Unfortunately, their predictions were proven correct because August was certainly a bad month for any Bitcoin owners.
Before we had even reached the middle of the month, hope was already turning towards a better September, but as things stand, there is no relief in sight for digital assets investors. Everywhere you look, there is nothing but bad news for Bitcoin investors, and now they are being told to brace for another month of misery.
History Suggests September Will Be Another Bad One
Since 2013, September has been characterized as the month with the worst performance of all crypto assets, with Bitcoin generally bearing the brunt of it. These poor September returns have historically been directly linked to the performance of the stock market.
This annual downturn in both the stock market and crypto assets has since been dubbed the “September effect.” Considering the massive beating the stock market has been taking recently, it is safe to assume that any hope of a good month for Bitcoin is fleeting at the most.
One theory behind this phenomenon is that as people return from their holidays, they immediately try to minimize losses before the close of the year. The need to pay school fees has also been suggested as another cause of this sudden drop in investment activities across the board.
Regardless of the reasons behind this downward trend, one certain thing is that if things continue in this trend, then investors should brace for the price of Bitcoin to reach as low as $17,600. September is very likely to be another red month for BTC owners.
Jerome Powell’s Keynote Address Makes Thing Worse
As if the crypto industry was not battling against enough problems already, recent comments made by the chairperson of the Federal Reserve, Jerome Powell, have only made the situation worse.
Speaking during his highly anticipated keynote address on inflation, Powell said businesses and individuals alike should prepare for a lot more pain before the central bank manages to bring inflation under control.
Such remarks usually result in investors buttoning down even tighter, which is the last thing that the already struggling crypto markets need right now. Powell went on to elaborate on the Federal Reserve’s plans to curb inflation, saying that what is required is a sustained period of below-trend growth.
As expected, after a brief period of resistance in the hours after the damaging remarks from the Federal Reserve chair, Bitcoin witnessed a very sharp drop in value. The cryptocurrency was holding steadily at almost $22,000 before the speech, but by the end of the day, it had fallen as low as $20,700.
One Bitcoin Metric Is Giving Hope To Investors
While things seem quite gloomy on all fronts for Bitcoin investors, a few optimistic digital currency analysts have noticed what they believe to be a sign of what may prove to be sizeable gains in the coming month.
Using a complicated measurement of the activity of Bitcoin miners, experts such as Charles Edwards came up with the concept of “hash ribbons.” This is a way of trying to predict the best time to buy Bitcoin assets based on how crypto miners are behaving in the industry.
According to the hash ribbons estimate, the best time to invest in Bitcoin may be just around the corner, and if these predictions turn out to be true, then we could see September shaping up to be a good month for Bitcoin after all.
Even though a few investors dare to hope that September will prove to be the turning point in the crypto market that they have all been waiting for, the evidence on the ground suggests otherwise.
Throughout August, except for a few blips here and there, the value of Bitcoin has continued to drop. Many investors are turning to Ethereum’s proposed merger in the hope that it may rescue the markets, but even that is not certain.
The future of Bitcoin and all other digital currencies looks very bleak for the time being.
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