Bitcoin’s poor trading action could go on for another month as traders wait for a sense of direction to emerge about U.S. interest rate cuts and the looming presidential election. August was a tough month for the leading cryptocurrency. Bitcoin slid 10.25% for its worst month since April, while ether dropped 23.66% in its third monthly drawdown and worst month since June 2022. The discrepancy supports the feeling in the market that although bitcoin has had isolated success thanks to ETFs in 2024, the rest of crypto has not followed bitcoin’s rally to all-time highs and is struggling. “It’s not a pretty picture across the crypto landscape at the moment,” said Rob Ginsberg, chart analyst at Wolfe Research. “Bitcoin is still stuck in a descending trading range as price gradually deteriorates off the March high. While a breakout would be extremely bullish, we continue to respect this trend. Revisiting the bottom of this range in the low $50,000 region looks likely in coming weeks.” “Since peaking in March, bitcoin’s trend has been deteriorating, making a series of lower highs and lower lows,” Ginsberg added. “Until that changes, either via a breakout or more gradual reversal, we will continue to maintain a bearish outlook on the near- to mid-term direction of price.” Bitcoin was already sliding during holiday weekend trading, approaching $58,000. Historically, September is the worst month for bitcoin — and other markets too, like U.S. stocks. Bitcoin has finished lower in eight of the last 11 Septembers and the month has the largest average loss of the year for the coin at 4.8%, according to CoinGlass. Last year ended what had been six-year-long losing streak for bitcoin in September. Bitcoin has been stuck in a range between $50,000 and $70,000 since April and is likely to stay there for another a month at least. Part of what made August so tough, apart from the early slump in stocks, was the supply overhangs in bitcoin – although they’ve been mostly abated or been resolved by now, according to Alex Thorn, head of research at crypto asset management firm Galaxy Digital. “Most of the remaining U.S. government bitcoin supply was recovered from theft and is likely to be returned rather than sold, Germany has finished selling, we believe that bitcoins from the Mt. Gox estate have mostly been distributed, [and] all the various bankruptcies have returned available coins to creditors,” Thorn said. “From a supply standpoint, bitcoin looks to be in good shape moving forward.” “A positive catalyst could come in the form of FTX cash distributions, which we expect the estate to initiate over the next six months,” Thorn added. “That distribution will see a large amount of cash delivered to a pool of creditors largely comprised of known crypto investors who could look to re-invest in the sector.” Bitcoin could stay rangebound until as late as November, with the U.S. presidential election weighing so heavily on investors, according to Thorn. He said a Trump victory would likely be an upside catalyst while any downside impact of a Harris victory is likely to be minimal. “I would expect to see chop until we get more clarity on rate cut expectations and the election,” said John Todaro, an analyst at Needham. “At this stage, there appears to be no clear leader on the election.” While the market is already pricing in significant rate cuts, the question is how many and when. Thorn said it’s possible that only a surprise would actually affect the near-term price of bitcoin. The Federal Reserve’s next two-day policy meeting takes place Sept. 17-18. —CNBC’s Michael Bloom and Nick Wells contributed reporting.
Beware of a bitcoin backslide to $50,000 as it enters worst month
