Bitcoin, the original cryptocurrency, might see a resurgence in market share during September, even if it’s only temporary. Despite its status, Bitcoin’s summer performance hasn’t matched the gains of other digital currencies. While Ethereum (ETH) has been in the spotlight, Bitcoin has decreased by 7% in August, contrasting sharply with ETH’s 17% increase. Over the last couple of months, Bitcoin’s growth has been minimal, less than 1%, significantly trailing ETH’s impressive 74% surge.
Data from TradingView indicates that Bitcoin’s dominance, reflecting its proportion of the overall cryptocurrency market, has fallen by over 5% in the past month. However, the market now includes many publicly traded companies investing heavily in crypto to generate shareholder returns. If September trading proves volatile, as many anticipate, Bitcoin could become an attractive option for short-term gains.
Matthew Sigel, Head of Digital Assets Research at VanEck, notes that while excessive leverage isn’t apparent as in past cycles, numerous new crypto-related stocks require consistent buying pressure to maintain their value. He suggests that a decrease in retail investor interest could negatively impact these stocks, potentially leading Bitcoin to outperform them.
Historically, September tends to be a challenging month for Bitcoin. Although it ended the month positively in the last two years, data from CoinGlass reveals that Bitcoin experiences an average decline of 3.7% and a median decline of 4.3% in September, based on data going back to 2013.
Conversely, October has typically been a strong month for Bitcoin, rallying in all but two instances since 2013, earning it the nickname “Uptober” within the crypto community. Bitcoin’s average and median returns for October are approximately 21%.
Satraj Bambra, CEO of Rails, a hybrid crypto exchange, predicts that Bitcoin will likely fluctuate at the beginning of September, potentially coinciding with peak Ethereum-Bitcoin (ETH-BTC) levels. This could lead to a cooling-off in the ETH-BTC ratio, allowing Bitcoin to regain some market share against Ethereum in September. The ETH-BTC ratio compares Ethereum’s performance relative to Bitcoin. A rising ratio indicates Ethereum is performing better than Bitcoin.
Looking ahead, investors are closely monitoring the Federal Reserve’s meeting scheduled for September 16-17, especially after Chair Jerome Powell suggested the possibility of an interest rate cut earlier this month. Historically, Bitcoin performs well in environments with increased liquidity.
While Bitcoin remains susceptible to broad market sell-offs and potential weakness due to deteriorating macroeconomic conditions, analysts believe continuous support will come from large-scale Bitcoin purchases and inflows from Bitcoin ETFs.
*It is important to note that the original article stated Bitcoin reached an all-time high of nearly $125,000 on Aug. 13. This is incorrect, as Bitcoin’s all-time high is closer to $69,000.*
