Bitcoin and other cryptocurrencies had a rough start to September as they experienced a sharp decline in value. This downward trend was exacerbated by negative regulatory news, causing a reversal of gains from a recent rally. Unfortunately, history indicates that this is just the beginning of a difficult month for the crypto market.
Over the past 24 hours, the price of Bitcoin has fallen by 4% to $26,000. Prior to the news on Thursday regarding the Securities and Exchange Commission’s delay in approving spot Bitcoin exchange-traded fund (ETF) applications, Bitcoin was trading around $27,500.
Earlier in the week, Bitcoin had seen a surge in value, reaching $28,000. This surge was prompted by a court ruling that seemed to pave the way for the approval of a spot Bitcoin ETF, which has long been regarded as a game-changing catalyst for the crypto industry. However, these gains have now evaporated.
“Bitcoin ended August with an 11% decline, closing at $26,000. This was its worst performance since last November,” revealed Alex Kuptsikevich, an analyst at broker FxPro. It is worth noting that Bitcoin’s fall in November 2022 occurred following the collapse of crypto exchange FTX, a catastrophic event that only a tough August in 2023 was able to rival.
Furthermore, historical data paints a bleak picture for Bitcoin in September. This month has consistently been the worst-performing month for Bitcoin, much like it is for the Dow Jones Industrial Average and S&P 500 in the stock market. In fact, Bitcoin has experienced declines in each of the past six Septembers, with an average decline of 6% each September, according to Dow Jones Market Data.
Kuptsikevich noted, “Bitcoin’s 200-day average is now acting as a resistance…A drop to $24,700 seems like a significant short-term target for bearish investors.”
In addition to Bitcoin, other major cryptocurrencies have also suffered losses. Ether, the second-largest token, dropped 4% to below $1,650. Smaller altcoins have also displayed weakness, with Cardano experiencing a decline of 3% and Polygon plunging by 6%. Even meme-inspired coins were not spared, as Dogecoin fell 4% and Shiba Inu shed 2%.
It remains to be seen how the crypto market will fare in the coming weeks, but early indications suggest a challenging period ahead for Bitcoin and other digital assets.
Contact Jack Denton