Bitcoin (BTC) Enters September on Shaky Ground After August Losses

TLDR:

Bitcoin suffered its second-worst monthly close in 2024, ending August with 8.6% losses
Historically, September has been a bearish month for Bitcoin
On-chain metrics show mixed signals, with some supporting potential gains
Bitcoin price dipped to a 2-week low of $57,273 on September 1
Traders are positioned short on the futures market, reflecting bearish sentiment

Bitcoin, the world’s largest cryptocurrency, has entered September on uncertain footing following a disappointing performance in August. The digital asset closed the previous month with 8.6% losses, marking its second-worst monthly close in 2024.

As the market moves into September, traditionally a challenging month for Bitcoin, investors and analysts are closely watching price movements and on-chain metrics for signs of where the cryptocurrency might be headed.

On September 1, Bitcoin experienced a sharp decline of over 2%, with its price dropping to $57,273.

This dip occurred during the weekend when market liquidity is typically lower, making it more difficult for buyers to prevent further losses. The price movement has raised concerns among traders about the potential for continued bearish momentum in the coming weeks.

Historically, September has been a red month for Bitcoin, with data from CoinGlass showing an average loss of 4.5% over the years.

This pattern has led some analysts to speculate about the possibility of further price declines in the near term.

On-chain metrics present a mixed picture for Bitcoin’s prospects. Data from Santiment shows that crypto traders realized $4.251 billion in gains in August 2024, which could contribute to selling pressure.

However, whale transactions valued at $100,000 and higher have hit their lowest point in nearly four years, suggesting that large holders may be holding onto their Bitcoin rather than selling.

The supply of Bitcoin on exchanges has also dipped to its lowest level since December 2018, which typically indicates a lower volume of BTC available for immediate sale. This reduction in supply on exchanges is often considered a positive sign for an asset’s price.

The Market Value to Realized Value (MVRV) metric, used to identify whether an asset is undervalued or overvalued, shows that Bitcoin is currently undervalued on both the 7-day and 30-day timeframes. This could potentially support the case for price recovery in the coming weeks.

Technical indicators paint a more bearish picture. The Moving Average Convergence Divergence (MACD) momentum indicator on the weekly chart shows red histogram bars below the neutral line, suggesting underlying negative momentum in Bitcoin’s price.

Trader sentiment also appears to be leaning bearish, with CoinGlass data showing that traders are positioned short on the futures market. This positioning reflects the current negative sentiment but could lead to a short squeeze if prices were to move upwards unexpectedly.

Some analysts, like Rekt Capital, have identified key levels to watch.

#BTC

Bitcoin continues to retest the Channel Bottom

Bitcoin needs to Weekly Close above $58450 to confirm the Channel bottom (black) as support

Retest is still in progress$BTC #Bitcoin https://t.co/4tbcFtQEuF pic.twitter.com/juOeY0Tvta

— Rekt Capital (@rektcapital) September 1, 2024

Bitcoin needs to close above $58,450 on a weekly basis to confirm the bottom of a critical channel as support. This level could prove crucial for Bitcoin’s short-term outlook.