- Bitcoiners shudder at the mention of September.
- This September has delivered a pleasant twist for Bitcoin investors.
- Investor sentiment has flipped bullish, signaling a favorable outlook for risk-on assets.
Bitcoin soared to a new all-time high of $74,000 in March, driven by spot ETF mania. However, 2024 has also seen its share of sell-offs, with Augustโs yen carry trade unwind stoking fears of an impending bear market.
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Despite Septemberโs reputation as Bitcoinโs worst-performing month, historically averaging a 4.8% loss, this year has defied expectations.
Bitcoin Surprises
Contrary to a September slump, Bitcoin has defied the odds with a 7.9% surge, igniting optimism for even greater gains in the months ahead.
Bitcoin fluctuated between $52,700 and $64,800 in September, with the low resulting from the Bank of Japan signaling potential rate hikes that could further exacerbate the yen carry trade situation.
Yet, following the monthly low on September 6, Bitcoin rallied 23% to peak at the $64,800 zone, which has proven to be stubborn resistance going as far back as April.
While opinions remain divided on how the market will close out 2024, the Fear & Greed Index returned decisively to greed territory on Tuesday for the first time since August. Coupled with central banks pivoting, the stage is set for Bitcoin to retest its all-time highs before year-end.
Central Banks Ease Up
The Fed cut interest rates by 50 basis points on September 18, citing a cooling jobs market and being on track to meet its annual 2% inflation target. This decision resulted in a 5% surge in Bitcoin’s price, reflecting positive market sentiment following the announcement.
Fed chair Jerome Powell downplayed the significance of the cut, emphasizing that the central bank is not in a hurry to ease policy further. However, this move clearly indicated a shift toward quantitative easing.
Following the Fed’s lead, the People’s Bank of China announced a series of stimulus measures on Tuesday aimed at improving banking liquidity, stirring a positive response from markets.
Tuesday saw the Hang Seng experience its largest daily gains in seven months, while the CSI 300 posted its best day in four years. Meanwhile, Bitcoin saw moderate gains, closing with a 1.5% increase on the daily candle.
On the Flipside
- September has five more days remaining.
- Bitcoin dominance appears to have topped out at 58.7%, suggesting favorable conditions for alts.
- October and November are Bitcoin‘s best-performing months historically, with an average increase of 22.9% and 46.8%, respectively.
Why This Matters
Bitcoin’s September surge challenges long-held market assumptions, potentially setting the stage for a bullish end to 2024.
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