Bitcoin, the first cryptocurrency, failed to escape the September curse, delivering a negative return for the fifth year in a row during the 30-day period last month. Since 2017, the crypto asset has been on a losing run in September in terms of monthly performance.
While there is no specific explanation for Bitcoin’s dismal performance in September, analysts had hoped it would be able to break the curse this time due to the momentum it had created over the previous several months.
Bitcoin had recorded total gains of nearly 30% in July and August 2021, after three months of negative results.
The digital asset began trading in September at approximately $48,000 and quickly rose to a high of nearly $52,000 in the first few days. However, Bitcoin fell below $40,000, ultimately settling at $43,859 for the month. The September return was -7.34 per cent.
During the month of September, Bitcoin saw three significant declines: the first fall occurred when El Salvador recognized Bitcoin as legal tender; the second when the news of Chinese property developer Evergrande’s bankruptcy broke; the third after China imposed a ban on cryptocurrency transactions.
“Having fallen below $40,000 and touching $39,000 after breaking the $50,000 resistance, many experts are hoping that the coin will surprise us by upending the conventional trends, given that the market is rallying with an all-time high number of investors,” CoinDCX spokesperson said.
Experts believe the asset is presently moving towards $44,500, which is its next strong barrier, and that a rally may occur if the break occurs. Bitcoin is now in a consolidation period and will stay so until it surpasses the $45,000 level.
While the asset seems to be favourable at current levels, the chief revenue officer at ZebPay Nirmal Ranga thinks that the macroeconomic changes that have occurred in the ecosystem have generated uncertainty, favouring the bears considerably.
“Having said that, we think that this will be a short-term impact, and in October, we expect bitcoin to see attractive volumes and growth since accumulation is likely at these levels. Volumes have started to see a recovery, which is necessary for prices to hold,” Ranga added.
Technical outlook for October
Bitcoin had a strong start to the month, reaching a high of $52,944. At higher levels, the asset encountered strong resistance and had a rapid drop of almost 25%, resulting in a monthly low of $39,600.
The asset is trading in an ‘Ascending Triangle,’ according to Zebpay, and is taking multiple support around the $40,000 level.
“If the bulls manage to hold the support, Bitcoin might resume its move higher and a relief rally can be expected. The asset has strong resistance of around $45,000-46,500. If the breakout occurs above these levels, then the prices may rally above the $50k mark. On the contrary, the break or close below the recent low, the bears will take the lead and the prices could slide to $37,000,” Ranga said.
On the upside, $46,500 represents resistance, followed by $53,000. Supports are priced at $40,000 and $37,000, respectively.