It was a remarkably bullish September for bitcoin (BTC), bucking the long-running trend of it being the world's largest cryptocurrency’s worth month on record.
Despite an early-month dip, the BTC/USD pair closed the month more than 7% higher, seemingly putting to bed the ‘Septembear’ narrative that has historically dogged bitcoin at this point in the season.
A sharp downturn in the value of the US dollar, expedited by the US Federal Reserve’s jumbo 50-basis-point interest rate cut on the 18th, was an obvious tailwind.
That jumbo rate cut spurred risk assets into activity across the board as traders began to weigh up increased liquidity in the market.
Unfortunately, bitcoin’s sunny September session came to a crashing halt as the month drew to a close.
On the last day of the month, BTC/USD plummeted by 3.5%, with another 4% wiped from bitcoin’s value on the first of October.
The bulls took a walloping, with $127 million wiped from longs in the past 24 hours alone.
Bitcoin’s bullish September breaks down – Source: tradingview.com
The shock was felt on the US stock market too, as escalating tensions between Iran and Israel neared their breaking point.
Markets remain on tenterhooks as the two nations exchange blows, raising the risk of full-on regional conflict.
Analysts are divided on how this flaring up for Middle East tensions will impact the global markets, but it’s safe to say that bitcoin investors are taking a decidedly wary approach for now.
However, there is a sense that, at least on the macroeconomic front, the future looks relatively bright for bitcoin.
Bitwise analysts stated: “With further Fed rate cuts expected and seasonal trends favouring strong performance in the final months of the year, bitcoin and other cryptoassets are anticipated to benefit from increasing liquidity and could see significant gains through 2025.
Although a US recession remains Bitwises’s “base case”, this “may not be as detrimental to Bitcoin and other cryptoassets as some might fear”.
“On the contrary, it could lead to greater expectations of Fed rate cuts and US dollar weakness, which might actually provide a tailwind for bitcoin.”
Analysts added that “the rising global liquidity tide will be a strong support for scarce assets like Bitcoin over the coming months and well into 2025”.
For now bitcoin is swapping for around $61,130, nearly 5% lower week on week.