The future of Bitcoin has been a topic of great speculation and debate within the cryptocurrency community. Benjamin Cowen, an analyst and founder of Into The Cryptoverse, has recently shared his insights on the potential trajectory of Bitcoin in the coming month of September. Based on his analysis and comparisons to historical data, Cowen predicts a rather grim outcome for the world’s most valuable cryptocurrency.
Bitcoin is currently trading at approximately $25,860, and it has been under significant pressure in recent weeks. After experiencing a surge of nearly 60% from its November 2022 lows, Bitcoin suffered a setback due to the collapse of FTX and the bankruptcy of several centralized finance (CeFi) lending platforms like BlockFi. As a result, the coin retraced from its peak of around $31,800 in July 2023.
Furthermore, bears took control in August, erasing all gains achieved in July. By the end of the month, Bitcoin had declined by approximately 20% from its July 203 highs. A significant scare was triggered on August 17, leading to losses across the board.
Cowen’s analysis focused on the performance of Bitcoin in previous halving cycles. He noted that the coin tends to contract in value during the entire month of September leading up to the halving event. Data from the past two pre-halving years indicated an average return of -11.71% for Bitcoin in the month of August. In comparison, Bitcoin lost 11.31% in August of this year.
Based on this analysis, Cowen predicted an even bleaker outlook for BTC in September. He estimated that Bitcoin would likely drop to $21,400 by the end of the month, aligning with historical trends prior to halving.
However, there may be a glimmer of hope when considering the performance of Bitcoin in September during previous halving cycles. The average return during those periods was -5.66%, indicating that BTC could potentially fall to around $24,400 by the end of September. While still bearish, this assessment suggests that Bitcoin could experience further decline in the coming weeks.
Despite the short-term setbacks and uncertainties, Bitcoin supporters maintain a bullish sentiment over the medium to long term. Despite the sharp dump on August 17, Bitcoin experienced a slight recovery in the second half of August and the first week of September. This recovery has sparked hopes among bulls that Bitcoin may not be completely out of the woods.
However, a closer look at the price action reveals that BTC prices are still within the bearish candlestick of August 17. This particular bar serves as the anchor for the current price action. Additionally, trading volumes remain relatively low, suggesting a lack of significant market interest.
To fuel a potential recovery, Bitcoin supporters are placing their hopes on the approval of a spot Bitcoin Exchange-Traded Fund (ETF) by the Securities and Exchange Commission (SEC). If approved, this derivative product would open the door for institutional investors to gain exposure to Bitcoin, potentially driving up demand for the cryptocurrency.
While Benjamin Cowen’s analysis presents a rather pessimistic outlook for Bitcoin in September, it is crucial to remember that the cryptocurrency market is highly unpredictable. Historical data and patterns can provide valuable insights, but they are not definitive indicators of future performance. As Bitcoin continues to navigate through various challenges and developments, it remains an intriguing asset to watch for both investors and enthusiasts alike.
[Feature image from Canva, chart from TradingView]