Key Points
- Bitcoin (BTC) begins September with a bearish outlook due to decreased investor demand.
- The altcoin industry also experienced a negative impact, with over $152 million liquidated from crypto leveraged traders.
Bitcoin (BTC) signaled a bearish outlook as it started September, following a 9% decline the previous week. This resulted in the cryptocurrency ending August below the crucial support range of $58K to $60K.
Historically, Bitcoin’s performance in September has been poor, particularly following halving events.
Impact on the Altcoin Industry
The altcoin industry was not immune to the bearish volatility of Bitcoin. This led to the liquidation of more than $152 million from crypto leveraged traders.
Despite improvements in fundamental aspects since mid-March, Bitcoin has been stuck in a bearish correction mode. Some analysts have observed the formation of a bullish flag pattern, often associated with a continuation of the previous trend. However, on-chain data analysis indicates a market exodus by investors.
The fear and greed index for Bitcoin dropped to 26 percent, showing extreme investor fear as the Bitcoin price fell below $58k. Glassnode’s market data analysis also showed a sustained decrease in exchange-related on-chain activities, suggesting lower investor interest.
Bitcoin ETFs Experience Significant Outflows
US spot Bitcoin ETFs have seen significant outflows in recent days, mirroring the performance of spot Ether ETFs. On one Friday, the US spot BTC ETFs registered a net cash outflow of around $175.67 million and a total traded volume of approximately $1.54 billion.
Significant outflows from ARK 21Shares Bitcoin ETF (ARKB) and Grayscale’s GBTC have contributed to the overall bearish outlook. Even BlackRock’s IBIT registered zero net cash flows on that Friday.
Upcoming Economic Shifts
Despite the bearish outlook, the supply of Bitcoin on centralized crypto exchanges is at multi-year lows. This could mean that the bearish outlook for Bitcoin might end soon, particularly in light of the upcoming economic changes in the United States.
The US Fed is expected to begin interest rate cuts this month, ushering in a period of ‘easy money’. However, some economists believe these anticipated interest rate cuts could trigger a sell-the-news event in the following weeks.
From a technical perspective, Bitcoin’s price could continue to fall in the coming days, potentially retesting the support level above $54K. However, Bitcoin’s price is expected to rebound in the fourth quarter and the first half of 2025, which could mirror the 2017 bull run.
