September brings uncertainty for Bitcoin amid declining network activity and ETF outflows. Analysts consider a potential market cooling following August's rally.
Decrease in Bitcoin Network Activity
According to the analytics platform Glassnode, Bitcoin's network activity has notably slowed. The monthly average of change-adjusted transfer volume fell 13%, sliding from $26.7 billion to $23.2 billion. If this dips below its yearly average of $21.6 billion, it could signal a broader contraction in demand.
Institutional Outflows' Role
Outflows from spot Bitcoin ETFs are also creating pressure on the market. Data from Ecoinometrics suggests that as of last Friday, its flows-to-price model projected Bitcoin at $107,000, with risks of dipping below the critical $100,000 level. Georgii Verbitskii, a derivatives trader and founder of TYMIO, remarked that "we seem to be entering a cooling-off phase that could last through September."
Historical Challenges in September
Historical data indicates that September is one of the weakest months for Bitcoin, with an average monthly return of -3.77% over the past 12 years. Verbitskii warns against rushing into new bullish bets: "Long positions only make sense if we reclaim and hold above $118,000."
Overall, September appears to be a month of caution for Bitcoin, with potential testing of the $100,000 level. Analysts suggest that declining fundamentals and ETF outflows may lead to increased volatility.
