Bitcoin Analysis for September 2022: Historically the Worst Month

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Recently, S&P 500 was a hot topic as most downturns have been recorded since 1928. However, Bitcoin has no exemption. September is said to be the historically worst month for this cryptocurrency since 2013.

September Has Been Bitcoin’s Worst-Performing Month Since 2013 

September was predicted to be Bitcoin’s (BTC) worst-performing month since 2013, as its price is expected to dip further. According to the available data, BTC has only displayed a value rise in September 2015 and 2016. Other than those, the flagship digital asset recorded a 6% decline in September.

Bitcoin and September Effect: The Psychology Behind 

Bitcoin has recorded losses in the previous five months of 2022. So, many crypto experts predict that BTC might suffer the same pains if historical data is the basis.

The poor track record of this crypto asset across the previous September months, from 2013 to 2021, coincides with the declines in the stock market. For example, the US benchmark S&P 500’s downturn this month is 0.7% in the past 25 years.

The September effect was dubbed this annual decline by traditional chart analysts. There is even an argument between analysts that after going back from summer vacations this month to tax losses or lock gains, investors depart their market positions ahead of the 2022 end.

Analysts also state that investors liquidate their assets as well in September to pay annual school costs for their children.

Bitcoin and Stock Market Correlation 

The correlations between the stock market and BTC have been positive during and after the COVID-19 pandemic. In other words, the reflecting price trends may also heighten the crypto asset’s likelihood of dropping high in addition to the September effect.

Seven V. Matos tweeted on August 22, 2022, “So expect low volume, chop & random violent moves in either direction. The point of this post isn’t to fearmonger anyone. Always a green markets somewhere. I’m sharing insight on what to expect to save newer retail traders from excruciating pain. Be patient and embrace the suck.”

Bitcoin’s Recovery Can Be a Relief Rally, Analysts Believe 

The losses of Bitcoin that occurred in 2022 resulted from fear of the rate hikes of Federal reserves in addition to the $120 billion bond-buying plan’s complete unwinding to resolve the rising inflation.

However, the narrative of the market altered to a belief that inflation had peaked. After the US consumer price index in July resulted in 8.5% vs. 9.1% in June, this hope has grown. This leads to speculations that the Federal might tone down the tightening bond-buying plans.

Meanwhile, several analysts argue that BTC’s recovery can be a relief rally, trapping investors who believe the market has bottomed.

According to Lark Davis on his August 22, 2022 tweet

“The psychology of a relief rally

 Price gets just bullish enough to fool you that this rally is the real deal.

 There could be an end to the pain.

 Then BLAMO, the market rugs you shattering your hopes.

 Expect this a few more times during the bear!”

Additionally, many Federal officials still favor a 75bps rate hike alongside their pledge to reduce inflation to 2%. This results in continuous prevailing correction trend risk of S&P 500 and Bitcoin this month, expecting further annual lows.

Is It Insane to Buy BTC this Month?

The monthly chart that utilizes BTC fundamental tools looks ugly as well. The hash ribbons on monthly timeframes are bound to properly issue the buy signal even if there is a signal that triggers on the daily.

Not only that, but BTC is also above the production cost’s lowest point. The production cost refers to the metric analyzing the costs that miners incur on each BTC production on average.

The bear market in 2018 closed the monthly candle below average’s lowest point. Although there is a key in closing below it in the last crypto winter, it is worth noting that the swing low was already present when it occurred.

This suggests that BTC might trade sideways. Then, it would also accumulate at such prices for a long time. However, a $17,500 BTC price may hold up as the bottom.

Overall, analysts find September a red month for BTC once again based on the macro, fundamental, and technical factors.

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ChesWorkShop commits to presenting fair and reliable information on subjects including cryptocurrency, finance, trading, and stocks. However, we do not have the capacity to offer financial guidance, advocating instead for users to conduct their own diligent research.

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