Bitcoin (BTC) faced another setback on Monday, dropping to around $57,500 and extending its seven-day decline to over 10%.
This slump aligns with a broader downturn in the cryptocurrency market, with major coins like Solana (SOL), BNB, XRP, and Cardano’s ADA falling by up to 3%. Dogecoin (DOGE) led the losses, plunging by 5%.
ETF Outflows and Market Reactions
U.S.-listed exchange-traded funds (ETFs) tracking Bitcoin saw total net outflows of $175 million last Friday, marking the fourth consecutive day of losses. Ether (ETH) ETFs, despite $173 million in trading volume, reported no net inflows or outflows, according to data from SoSoValue. With the U.S. observing the Labor Day holiday, traditional markets remained closed.
September: A Historically Bearish Month for Bitcoin
Some traders have pointed out that Bitcoin’s recent losses are consistent with the historical trend of September being a challenging month for the cryptocurrency.
However, those traders also suggests that a potential interest rate cut by the U.S. Federal Reserve in September could disrupt this trend. “If the Fed cuts rates, it might help Bitcoin rewrite its negative history,” they explained. Rate cuts generally lead to an increased flow of U.S. dollars in the economy, potentially strengthening Bitcoin’s appeal as a store of value.
Understanding Seasonality in Bitcoin’s Price
Seasonality refers to the tendency of assets to experience regular and predictable changes throughout the year. For Bitcoin, this could range from profit-taking around tax season in April and May, leading to price drops, to the bullish “Santa Claus” rally in December, which often signals increased demand.
Will Bitcoin Overcome the September Slump?
As Bitcoin struggles through another challenging September, all eyes are on the potential impact of macroeconomic factors, including a possible Fed rate cut. While history suggests a tough month ahead, there are reasons to believe that Bitcoin could defy the odds and emerge stronger.
