As anticipated based on historical trends, Bitcoin, the biggest cryptocurrency by market capitalisation, closed August down 8.73%.
Ali Martinez pointed out in a recent tweet that although Bitcoin fulfilled its historical story for August, similar predictions are in place for September, which is usually seen as a bad month for Bitcoin.
Five indications, though, seem to indicate that this year could be different, according to new information from Spot On Chain that was posted in a twitter thread.
Initially, a bad August might prevent a negative September. Major selling pressures have subsided for the other reasons mentioned, and long-term holdings are still strong. Fourth, Bitcoin ETFs may serve as a revitalised source of funding, and finally, favourable laws, interest rates, and capital availability may contribute to a September market surge.
Bitcoin to break September’s jinx? Here are five indications
The historical observation that forms the basis of Spot On Chain’s research is this: although September typically experiences a decline, this is not a guarantee. In over 43% of cases, a favourable September has come after a dismal August. Given that Bitcoin had a negative August this year, there’s a probability that the worst is over, paving the way for a possible return.
https://x.com/spotonchain/status/1830065189376704749
Second, there is far less selling pressure on Bitcoin now. The German government, which sold 49,859 BTC worth $3 billion in early July and is no longer in possession of BTC, was one of the three main selling powers that unloaded 170,917 BTC, or $10.69 billion, to the market in July and August. Mt Gox still has 44,898 BTC, or only a third of the original total, worth $2.65 billion, after repaying 95,958 BTC in July and August. On August 2, GenesisTrading delivered 24,068 BTC as repayment and ceased to retain BTC.
But much as in the German government case, the U.S. government still has $12 billion worth of confiscated Bitcoin, totalling 203,650. Recent activities, however, point to a low chance of a near-term sell-off.
The U.S. government transferred 35,516 Bitcoin, valued at $1.48 billion, to Coinbase in 2023 and 2024 at a price of about $41,637. However, because the majority of sales were made over-the-counter with little effect on the market, there were often only mild price movements.
Another encouraging element is the continued presence of long-term holders, who in August added 262,000 BTC to their overall holdings, or 14.82 million BTC, or 75% of the total supply. Similarly, if the trend of alternating between good and negative months persists, BTC ETFs may become a revitalised purchasing force.
The possibility that the Federal Reserve may lower interest rates in September is another factor that could encourage investors to purchase Bitcoin or Bitcoin ETFs. FTX will pay back its debtors $16 billion in cash rather than in cryptocurrency, which may be reinvested in Bitcoin and the wider market.
