Categories: Business

Historical Data Warnings Ring True As Bitcoin Price Plummets

September is typically a bad month for the price of Bitcoin. This year is shaping up to be one of the worst on record. We discuss why in the following article.

Bitcoin is always volatile and historical data shows that September is typically the month it takes the biggest hit. This month has followed the trend, and Bitcoin could have one of the worst months in its history. But does this mean now is the ideal time to buy?

Read on as we discuss the Bitcoin price shock and why it has happened.

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The Decline In The Value Of Bitcoin

Bitcoin has lost 10% of its value in the last two weeks alone. It has lowered from a price of $64,190 to $57,800. The reasons for this are many. The shadow of recession looms heavy over the United States.

Huge outflows from Bitcoin ETFs have led to some predicting it could fall as low as $40,000 in a major price crash.

While this may seem to be doom and gloom for some, others are predicting that Bitcoin has already hit its bottom. If an easing of Federal monetary policy begins, this could signal the uptick Bitcoin needs and now could be the perfect time to buy.

Bitcoins Recent Performance

Late on Tuesday, according to data provided by Coingecko, Bitcoin reached a low of $55,746 at one point. This occurred just as the stock markets in Asia opened. It has now picked back up to $56,463.

Bitcoin’s dip did mirror an overall disappointing day on global markets. In Japan, the Nikkei started 1000 points down from its close. In the United States, the Dow Jones Industrial Average was also down 600 points.

An identical fall also happened at the same time one week before. The result of this was a one-hour push of $95 million worth of liquidations. Most of these had been long-held positions that were waiting for the price to go up.

Bitcoin Etfs Have The Largest Outflow In Four Months

Concern grew after Monday when an outpouring of money came from Bitcoin exchange-traded funds (ETFs). Eleven of these recorded an outflow of $287.8 million. This was second only to May 1st when a record $500,000 came out of them.

Aside from this, Bitcoin ETFs have had a quite positive start. Introduced in January, an exchange-traded fund is a collection of assets that can be bought into. When people buy into an ETF, they don’t own the asset, in this case, Bitcoin.

Instead, they own part of the company that has bought it. They can be used to hedge against risk, valuable in a volatile market asset like Bitcoin.

Us Payroll Data

This downward movement in price was instigated by further signs that the US may be heading for a recession, with figures in manufacturing looking troublesome. The purchasing managers index, a survey that gathers monthly insights from private manufacturing firms was a miss.

With many fearing a stall in the economy, Nvidia then heightened fears by leading a sell-off. One place to look for clues on the state of the US economy will be with the release of US payroll data this coming week.

This is a nonfarm payrolls report, so excludes any data on farm workers, private households, and government employees. If this payroll data is not positive, it could spell even further woes for the cryptocurrency.

This data is important as it provides unique insights into the state of the US economy. Released every month, they are curated by the Bureau of Labour Statistics. Certain jobs, like farm work, are omitted because they are seasonal and may compromise accurate data.

Yet the reports still manage to get over 80% of the jobs market. This includes hours worked, unemployment, and labor force participation.

Several predictions can be made from this report. When more households have income, consumer spending increases, buoying profit. This can also work in the opposite direction. Secondly, the data is also used to make decisions on possible cuts to interest rates, all of which will move markets and crypto.

The Current State Of Cryptocurrencies

Now may not be the time to panic. The problem seems not to lie with Bitcoin but with the economy as a whole. Other currencies are also trading at lows showing it is not unique. Solana dropped by 6.4%, with Dogecoin and XRP also down.

Ethereum’s woes have continued with people now viewing a lack of enthusiasm and sell-off by its creators as a time to leave the currency.

This has also pushed the flailing Toncoin down even further. Once a rival for Bitcoin, it dropped out of the top ten spectacularly. This was due to the recent arrest of Telegram founder Pavel Durov in France. It is still unknown if he will be charged.

The companies woes were exasperated by a series of network outages. A further drop may be one the currency will never recover from.

For now, the consensus from investors seems to hold. The US currency will be the decider on the price of Bitcoin. It is up to you to decide if you will take the risk and buy now, or wait to see if further drops occur.

Disclaimer: The above references an opinion of the author and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice. Invest responsibly and never invest more than you can afford to lose.