While the broader cryptocurrency market displays sideways movement, Bitcoin (BTC) is striving to solidify its recent high point as a dependable support level. Following a period of fleeting price swings prompted by the Federal Reserve’s (Fed) interest rate adjustment, there’s potential for the leading digital currency to finish the month showing gains.
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Bitcoin Eyes Extended Gains
This past Wednesday, Bitcoin encountered resistance around $117,000, a level it hadn’t tested in close to a month, before encountering a pullback. Since late August, the price of Bitcoin has largely fluctuated within a range of $107,000 to $116,000, briefly touching lower points earlier in September.
The recent price correction led many investors to anticipate another “Rektember,” a term often associated with September due to Bitcoin’s historical underperformance during this month. CoinGlass data confirms that September has generally been a challenging month for Bitcoin, with an average loss of 2.99%.
However, the past two years have defied this trend, with Bitcoin achieving positive returns of 3.91% in 2023 and 7.29% in 2024. Crypto Jelle, a well-known analyst, observed that with less than half of September remaining, Bitcoin appears to be building momentum for a sustained period of growth over the coming months.
After recovering from its early September dip, Bitcoin successfully broke through the $114,000 mark last week, establishing it as a new support level over the weekend. As a result, Bitcoin currently boasts a 6.35% gain for the month, making it the second-best September on record, according to data from analytics platforms.
Jelle pointed out that historically, “a positive September has often led to the subsequent 2, 3, or even 6 months also closing with gains.” Based on this pattern, he suggested that if Bitcoin maintains its upward trajectory for the remainder of September, “the fourth quarter looks exceedingly promising for BTC.”
Bitcoin Re-evaluates Crucial Level Amidst Market Jitters
Rekt Capital, another market analyst, highlighted that Bitcoin closed the previous week above $114,000 and is currently retesting this level as a foundation during the current week’s minor downturns. This retest could introduce some brief, volatile dips below this critical point if this week’s close remains above $114,000.
Conversely, a failure to maintain this level on a weekly basis could compromise Bitcoin’s prospects for achieving a third consecutive phase of price appreciation.
Overall, Bitcoin needs to successfully retest and maintain $114,000 as a reliable support level on the weekly chart. Any volatility that pushes the price below this point is likely to be a short-lived dip that recovers by the end of the week when the new weekly close occurs.
Many market observers anticipated a degree of volatility in the immediate future, particularly in light of the Federal Reserve’s anticipated announcement regarding its first interest rate reduction of the year. Altcoin Sherpa commented that “the expectation is for a 25 basis point cut,” stating that “25 bps = Business as Usual, but with an upward bias.”
He further stated that this decision would likely lead to a drop toward the lower end of the trading range or a period of choppy trading, “followed by an upward movement in late September/early October.” On Wednesday afternoon, the Federal Reserve announced a 25 basis point reduction in interest rates, bringing the new range to 4.00% to 4.25%, marking the first such cut since December of 2024.
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“Recent data suggests that the pace of economic growth has slowed during the first half of the year. Job creation has moderated, and the unemployment rate has modestly increased, although it remains at a low level. Inflation has risen and remains somewhat higher than desired,” the Federal Open Market Committee (FOMC) stated in its announcement.
Immediately following the announcement, Bitcoin retested both the $114,000 support and the $116,000 resistance levels before settling around $115,500.
Featured Image from Unsplash.com, Chart from TradingView.com