The crypto market is navigating one of its most challenging periods of the year, with Bitcoin showing signs of prolonged weakness as traders await critical macroeconomic signals. August has already cemented its place as a brutal month for digital assets, and early indicators suggest September may follow suit—historically one of the most volatile and downward-trending months for both Bitcoin and traditional markets.
With Bitcoin down over 10% in August—the steepest monthly drop since April—and Ether plunging nearly 24%, investor sentiment remains cautious. While Bitcoin achieved a milestone in 2024 with the approval of spot ETFs, the broader crypto ecosystem hasn’t mirrored its success. Instead, altcoins continue to struggle, failing to reach new highs despite Bitcoin’s earlier rally.
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Bitcoin’s Deteriorating Trend Since March Peak
Rob Ginsberg, a technical analyst at Wolfe Research, highlights that Bitcoin has been trapped in a bearish descending channel since hitting its peak in March.
“The overall sentiment in the cryptocurrency space is not favorable right now. Bitcoin remains within a clear downward trend, gradually eroding from its March highs. A breakout could be highly constructive—but until then, we must respect the prevailing trend.”
Ginsberg notes that Bitcoin may test the lower end of its current range, potentially revisiting the $50,000 level in the coming weeks if momentum continues to weaken.
The pattern since March has been telling: each rally has been weaker than the last, forming a series of lower highs and lower lows—a classic sign of bearish momentum. Without a decisive reversal or breakout above key resistance levels, analysts remain skeptical about a near-term recovery.
Why September Could Be Rough for Crypto
Historically, September stands out as the weakest month for Bitcoin performance. According to data from CoinGlass, in 8 out of the past 11 years, Bitcoin has closed the month in negative territory. On average, it posts a 4.8% decline during September, making it the worst-performing month on an annual basis.
Even though Bitcoin broke its six-year losing streak in September 2023, past patterns still weigh on trader psychology. Combined with ongoing uncertainty around monetary policy and U.S. politics, many investors are adopting a wait-and-see approach.
Alex Thorn, head of research at Galaxy Digital, explains:
“Bitcoin has been range-bound between $50,000 and $70,000 since April, and we expect this consolidation to persist for at least another month.”
This sideways movement reflects a market digesting previous moves while waiting for new catalysts—particularly around Federal Reserve policy and the upcoming U.S. presidential election.
Supply Overhang Fears Fade—But New Risks Emerge
One major concern in August was the perceived oversupply of Bitcoin hitting the market. Government-held reserves, bankruptcy estate liquidations (like Mt. Gox and FTX), and large sell-offs by nation-states contributed to downward pressure.
However, Thorn believes much of that supply overhang has now been absorbed:
“Most of the U.S. government’s Bitcoin holdings were seized from criminal activity and are more likely to be returned to victims than sold. Germany has completed its BTC sales from seized Silk Road assets, and Mt. Gox distributions have largely concluded.”
Even FTX’s remaining holdings—which once sparked fears of massive dumpings—could soon become a positive catalyst rather than a threat.
“The FTX estate is expected to begin reimbursing creditors within the next six months,” Thorn adds. “This will put significant capital into the hands of known crypto investors—many of whom may reinvest back into the market.”
Such a development could reignite demand and shift sentiment from neutral to cautiously optimistic by late 2025.
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Election Impact: Trump vs. Harris on Crypto Policy
Political uncertainty remains a wildcard. The U.S. presidential election in November looms large over investor decisions, especially regarding regulation and monetary policy.
Thorn suggests that a Trump victory could serve as a bullish catalyst for Bitcoin and digital assets. His past support for decentralized technologies and criticism of central bank overreach resonate with pro-crypto voters.
In contrast, a Harris win may not necessarily bring negative implications—any adverse effects are expected to be minimal.
“I don’t think a Harris administration would be hostile toward crypto,” Thorn says. “But Trump’s rhetoric tends to amplify risk-on behavior in this asset class.”
Still, until election outcomes—and their regulatory consequences—become clearer, volatility is likely to persist.
Fed Rate Cuts: The Lingering Question
Another pivotal factor is the Federal Reserve’s next move on interest rates. Markets have already priced in rate cuts, but the timing and magnitude remain uncertain.
John Todaro, an analyst at Needham, points out:
“Right now, there's no clear frontrunner in the presidential race, and the Fed hasn’t given definitive guidance. The real question isn't if they’ll cut—but how much and when.”
Rate cuts typically benefit risk assets like Bitcoin by reducing yields on safer investments (e.g., bonds), making high-growth assets more attractive. But without clarity, traders are hesitant to take large positions.
Until these macroeconomic questions are resolved, Bitcoin is likely to remain range-bound—with occasional swings driven by news flow rather than structural shifts.
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Frequently Asked Questions (FAQ)
Q: Why is September historically bad for Bitcoin?
A: Over the past decade, September has seen more down months than up for Bitcoin—8 out of 11 years ended negatively. On average, it drops 4.8%, possibly due to seasonal risk-off behavior among traders.
Q: Could Bitcoin really fall back to $50,000?
A: Yes—it’s within technical possibility if bearish momentum continues. With Bitcoin stuck in a descending channel since March, $50K represents strong historical support and could be retested before a reversal occurs.
Q: Will FTX repayments cause another market crash?
A: Unlikely. Unlike uncontrolled sell-offs, FTX repayments will go directly to creditors—many of whom are experienced crypto investors likely to reinvest gradually rather than dump holdings.
Q: How do U.S. elections affect Bitcoin prices?
A: Elections introduce regulatory uncertainty. A Trump win may boost crypto sentiment due to his pro-innovation stance, while Harris is seen as neutral-to-cautious—neither expected to launch aggressive crackdowns.
Q: Are we past the worst of the crypto supply overhang?
A: According to analysts, yes. Government sales (Germany), Mt. Gox distributions, and seized asset liquidations have largely concluded. Future inflows from estates like FTX may actually stimulate demand.
Q: What’s holding Bitcoin back from breaking out?
A: Lack of clear direction from the Fed on rate cuts and election uncertainty are keeping investors cautious. Until there’s macro clarity, expect continued consolidation between $50K–$70K.
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