The crypto market has faced a new wave of negativity, with analysts warning of a potential bitcoin price drop below $50,000 as soon as this weekend.
Crypto Trader Sentiment Worsens
The Crypto Fear & Greed Index, a multifactorial measure of crypto market sentiment, fell to a one-month low of 22, last seen at the beginning of August. The index dropped to 17 when bitcoin price fell to $49,000, according to analyst and CryptoQuant author Axel Adler in his Sept. 6 post on platform X. "During the mining ban in China, the index dropped to 10%. The maximum drop to 6% occurred during the Luna crash. HODL.", wrote Adler.
Bitcoin's September Price Dip
September has historically been a month of downside volatility, with average bitcoin returns at -4.69%, making it the most bearish month based on average returns, according to CoinGlass data. This price drop aligns with previous bitcoin halving bull cycles, notes analyst Rekt Capital in his Sept. 6 post on platform X. "Bitcoin is down -6.19% for the month of September. This approximately matches the September single-digit downside experienced in 2022, 2021, 2020, 2018 and 2017. This downside is not out of the ordinary.", — adds the analyst, sharing a chart.
Recovery Prospects
Zooming out, this correction could precede a breakout due to an emerging cup and handle pattern, a bullish price setup signaling the extension of an uptrend. This pattern was shared by popular crypto trader Mags in his Sept. 5 post on platform X. "Bitcoin is forming a massive cup and handle pattern.", believes Mags. Bitfinex analysts also warn of a potential price drop below $50,000 before the real bull rally begins.
Analysts continue to closely monitor the developments in the crypto market, warning traders of potential short-term declines but not ruling out bullish trend prospects in the future.
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