Key Points
- Bitcoin (BTC) and Ethereum (ETH) led a 7% drop in the total crypto market cap, with BTC teasing below $59K.
- Historical data and recent market trends suggest a bearish outlook for Bitcoin in September.
The total market cap for cryptocurrencies experienced a 7% decrease in the last 24 hours, driven by Bitcoin (BTC) and Ethereum (ETH). The market cap stood around $2.16 trillion on Wednesday, August 28, during the mid-European session.
Bitcoin, the leading cryptocurrency, saw a drop of over 6% in the last 24 hours, trading at approximately $58,820 at the time of reporting.
Ethereum and Market Liquidation
Ethereum, the second-largest cryptocurrency by market cap, led the altcoin sector with a bearish outlook. It slid nearly 9% in the past 24 hours, trading at about $2,450 on Wednesday.
Consequently, more than $323 million was liquidated from the crypto-leveraged market, with long traders accounting for about $288 million.
Historically, Bitcoin’s price performance has been weak in September. In the past ten years, only three Septembers have seen bullish trends. This, coupled with the market’s recent volatility, suggests a continued bearish trend for Bitcoin in the coming month.
However, shifts in the economic outlook in the United States, particularly following recent dovish comments from Fed’s Chair Jerome Powell, have led some crypto traders to hope for a bullish reversal in the fourth quarter.
Increased Profit Taking by Whales
Bitcoin has struggled to rally beyond the critical resistance/support level of around $66K in recent weeks, leading to more whales turning bearish. For example, ARK 21Shares Bitcoin ETF (ARKB) experienced its largest cash outflows of more than $101 million on Tuesday. As of this report, ARKB held about $2.88 billion in total assets under management.
Alongside the ongoing bleeding of Grayscale’s GBTC, US-based spot Bitcoin ETFs registered a net cash outflow of over $127 million on Tuesday.
On-chain data shows that cash inflows into Bitcoin have significantly slowed down in the past six months. This decrease in demand for Bitcoin has coincided with increased profit-taking from short-term holders, who have deposited over 33K BTC units in the past few days.
Bitcoin’s price is expected to continue its choppy trend in the coming months, before the onset of a parabolic phase in the fourth quarter and 2025. The altcoin industry is predicted to continue losing ground to Bitcoin, especially during the US election period when heightened volatility is anticipated.
From a technical standpoint, if Bitcoin consistently closes below $59k in the near term, it is likely to revisit below $55k.
