- Weak Demand and Increased Sell Pressure
- Seasonality Affects BTC Performance
- Forecasts and Potential Risks for BTC
Since early August, Bitcoin (BTC) has struggled to maintain a price above $60K, leading to decreased activity among traders, particularly in the first half of September. A report from Glassnode suggests that this lackluster price action reflects a decline in trading appetite and speculative activity on crypto exchanges.
Weak Demand and Increased Sell Pressure
A decrease in volume on crypto exchanges indicates weak demand from BTC traders and investors. Throughout August and the third quarter, there was an increase in sell pressure in the spot market. The Cumulative Volume Delta (CVD), which measures the net balance between buy and sell volumes, was predominantly negative in Q3.
Seasonality Affects BTC Performance
Bitwise suggests that seasonality may be a contributing factor to BTC’s poor performance in Q3, especially in September. Historically, BTC typically yields negative returns in August and September. This trend aligns with the general trend of weak summer performance across all assets, as investors often adhere to the ‘sell in May and go away’ strategy. However, October has historically been a strong month for BTC, with an average return of nearly 30%.
Forecasts and Potential Risks for BTC
If this pattern continues, it could indicate a strong rebound for BTC in Q4. However, crypto trading firm QCP Capital warns that the upcoming US election could trigger a risk-off event. The lack of a clear frontrunner and unclear policy positions from both parties could lead to increased market uncertainty as Election Day approaches.
At the time of writing, BTC is trading at $57K, just hours before the release of the US August Consumer Price Index (CPI) data.
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