3 Reasons Why Bitcoin (BTC) Price Could Rally in September – Details

TL;DR

Bitcoin’s recent downtrend could soon give way to a renewed rally due to emerging positive signals. On the other hand, some indicators suggest that the market correction may not be over yet. Back to the north?

Bitcoin experienced enhanced volatility in recent weeks, with the price swinging between $55,000 and $65,000. In recent days, the valuation of the asset fell to the downside, raising concerns that September could offer more pain to the bulls.

BTC Price, Source: CoinGecko

However, there are three important factors that could trigger a renewed rally. The first, and probably the most important, is the potential pivot of the US Federal Reserve. The US central bank is expected to cut interest rates after the next FOMC meeting scheduled for September 18.

The effort will make lending money cheaper, possibly increasing investor interest in risk assets such as BTC. Remember that the main cryptocurrency witnessed a substantial price increase at the end of August when Jerome Powell (Chairman of the Federal Reserve) promised a rate cut.

Next on the list is whale activity. As reported by CryptoPotato, big BTC investors have been on a buying spree lately despite price drops. Those holding between 100 BTC and 1,000 BTC now control more than 20% of the asset’s circulating supply, equivalent to roughly $230 billion. Additionally, the number of Bitcoin wallets with 100 BTC or more has reached 16,120, a 17-month high.

The accumulation of large amounts of the asset leads to a reduction in the available supply in the market, which could be followed by an increase in price (assuming that demand does not decrease). Additionally, the increase in the number of BTC whales could be interpreted as a positive sign by smaller players, which will result in more capital flowing into the ecosystem.

Last but not least, we will talk about the net exchange flow of Bitcoin. In the past week, outflows have mostly outpaced inflows, with two large red candles seen on September 3rd and September 6th. This suggests a shift from centralized exchanges to self-custody methods and could be considered bullish as it reduces immediate selling pressure.

BTC Exchnage Netflow, Source: CryptoQuant The bearish sign

Separately, one crucial factor indicates that Bitcoin’s correction could remain longer. This is the sale of miners who sold over 2,600 BTC over the weekend (according to crypto analyst Ali Martinez).

BTC Miners, Source: Ali Charts

Miners are among the largest holders of the asset. When they sell significant amounts of BTC, the circulating supply of BTC increases, which can drive the price down if demand doesn’t keep pace.

Miners usually part with their holdings to cover operating costs (electricity, hardware maintenance, and more). If they are selling more than usual, it could indicate that their profit margins are shrinking, which could be interpreted as a sign of difficult market conditions.

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