Bitcoin recently experienced a significant breakdown in its market structure, sparking concerns regarding its potential decline in the upcoming months. Historically, September has been a bearish month for Bitcoin, leading many to speculate about a possible significant downturn. Renowned crypto analyst Rekt Capital has delved into past trends, current market conditions, and the prospects for October, which is traditionally a bullish month.
September’s Historical Downside
According to Rekt Capital’s analysis, Bitcoin’s 7% drop in September is consistent with previous years when the market experienced similar declines. In 2022, Bitcoin fell by 7% in September, mirroring the single-digit losses observed in 2021, 2020, and 2018. This pattern indicates that September often brings bearish momentum, and the current decline is no exception. However, in extreme cases like 2014, Bitcoin has experienced sharper drops, such as the 19% dip during the bear market.
Despite the current downturn, the fact that 2024 is a halving year suggests that the downward pressure may not be as severe as in non-halving years. This historical context provides a nuanced view of the market’s behavior during this period.
Halving Year Impact
Rekt Capital also notes that sharp declines are less likely during halving years, as observed in 2016 and 2020. During these years, Bitcoin typically exhibited smaller price movements, both upwards and downwards. A 7% drop seems more probable, which could see Bitcoin settling around the $55,000 mark. Even in more extreme scenarios involving a 13% or 19% drop, Bitcoin might fall to $48,000 or lower. Nevertheless, such sharp declines are uncommon in halving years unless unforeseen economic events trigger a selloff.
October’s Bullish Outlook
Despite the bearish tendencies of September, October has historically been one of Bitcoin’s most promising months. Historically, Bitcoin has recorded significant gains in October, with an average return of over 20%. In 2020, a halving year similar to 2024, Bitcoin surged by 27% in October, raising hopes that the current downtrend might soon reverse.
Based on historical patterns, October could witness a rally ranging from 10% to 30%, aligning with previous halving years when Bitcoin began a new bullish phase. This historical precedent suggests that while September might bring consolidation, October holds the potential for a robust recovery.
What To Expect: Bullish & Bearish Outlook
Rekt Capital’s analysis indicates that Bitcoin has been consolidating around the $55,000 range, with the next critical level to monitor at $57,000. If Bitcoin breaks through this resistance, it could pave the way for a stronger upward movement. However, caution is warranted as the market remains uncertain. If Bitcoin retests the three-year resistance level near $46,000, a 19% pullback could push the market closer to this support level. Although this scenario is unlikely, it could set the stage for a significant rally in the future.
In conclusion, while September has historically been bearish, the prospects for October and the impact of a halving year provide a balanced outlook. Investors should remain vigilant and consider both the bullish and bearish scenarios as they navigate the evolving market landscape.
