As Bitcoin investors brace themselves for a “seasonal slog” in September, New York Digital Investment Group (NYDIG) head of research Greg Cipolaro points to potential opportunities.
In a September 10th NYDIG market update, Cipolaro described the potential near-term catalysts for Bitcoin as “sparse,” as the leading cryptocurrency enters one of its toughest months.
Historically, September has been challenging for Bitcoin holders, with a mean loss of 5.9% over the 13 years since 2011.
Monthly Bitcoin Returns. Source: NYDIG.
Something Cipolaro credited as a likely recurrence, noting that Bitcoin “may be stuck in a seasonal slog.”
However, despite the prevailing negative sentiment, he expressed optimism, suggesting that September still holds some opportunities.
Diamonds in the Rough: What Bitcoin Opportunities Does September Hold?
Cipolaro added that Bitcoin investors may only be able to look for a few catalysts external to crypto in the coming weeks, with a tight focus on particular macroeconomic developments.
Most catalysts have to do with macroeconomic data (inflation, unemployment, gross domestic product growth) or monetary decisions (Federal Open Market Committee interest rate decisions), and very few are crypto or Bitcoin-specific.
Most prominently, the approaching September 18th Federal Open Market Committee (FOMC) meeting to decide interest rates holds the most weight.
Following Fed Chair Jerome Powell’s comment that the “time has come” for the US Federal Reserve to cut interest rates, anticipation is high.
A 25 basis point cut is seen as the more favourable outcome, fostering long-term price appreciation for Bitcoin as the “jitters about a slowing US economy and the prospects of a recession” ease.
Conversely, a more aggressive rate cut could have an adverse effect, heightening recession fears and potentially leading to a significant Bitcoin retracement, with some anticipating a 20% drop.
Currently, traders assign a 27% probability to a 50 basis point cut, according to CME’s FedWatch tool. However, 10x Research warns that this contrasts with their view of the “prevailing consensus,” leaning towards aggressive cuts.
Growing Pains: Q4 2024 Set For Explosive Growth
While September has proven to be a difficult month for Bitcoin, Cipolaro highlighted the “seasonally strong Q4,” now less than three weeks away.
According to NYDIG data, October and November have typically been the strongest for Bitcoin, posting mean gains of 16.1% and 40.6%, respectively.
Something echoed by other analysts, such as popular pseudonymous trader Titan of Crypto, who pointed to the final quarter of this year as a potential breakout point, describing it as having “epic” potential for price action.
Meanwhile, historical and technical patterns suggest that a six-figure Bitcoin is “still in play” as we move toward 2025.
Cipolaro supported this view, noting that comparisons to previous cycles could indicate where we are in the broader bullish narrative. The recent uncertainty and volatility may just be growing pains.
Leading into Q4, Cipolaro noted the most “looming” concern for the crypto market as the upcoming US presidential election in November.
Former President Donald Trump has “made his mark” as the crypto-friendly candidate, but much less is known about Vice President Kamala Harris’ stance on digital assets, leading to heightened uncertainty and increased volatility in the meantime. Cipolaro added:
We won’t guess as to which candidate might win the election, but November might be a pivotal moment for the industry. Until that time, however, Bitcoin might be at the whims of the broader market backdrop.
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