Bitcoin has recently fallen out of its market structure, raising concerns about how low the price could fall in the coming months. September, a historically bearish month, has many wondering if a significant drop is on the horizon. Rekt Capital, a renowned crypto analyst, analyzed past trends, current market conditions, and the upcoming October, a typically bullish month.
The Historical Downside of September
According to Rekt Capital’s analysis, Bitcoin’s 7% drop in September is in line with previous years, when the market saw consistent declines. In 2022, Bitcoin dropped 7% in September, and similar single-digit losses were seen in 2021, 2020, and 2018.
This shows that September often leads to bearish momentum, and the current drop is no exception. However, in extreme cases like 2014, Bitcoin has seen sharper drops, such as the 19% dip during the bear market.
Despite the current decline, the fact that 2024 is a halving year suggests that downward pressure may not be as severe as in non-halving years.
Impact of the half-year
Rekt Capital further notes that sharp declines are less likely during halving years like 2016 and 2020. Bitcoin has typically seen smaller moves, both up and down, during these years. A 7% drop seems more likely, which could take Bitcoin to around $55,000.
Even in more extreme scenarios, such as a 13% or 19% drop, Bitcoin could fall to $48,000 or lower. However, such sharp drops are rare in halving years, unless unexpected economic events trigger a sell-off.
The optimistic outlook for October
Despite September’s bearish history, October is typically one of the best months for Bitcoin. Historically, Bitcoin has seen significant gains in October, with an average return of over 20%. In 2020, a halving year like 2024, Bitcoin rose 27% in October, providing hope that the current downtrend could end soon.
Based on historical patterns, October could bring a rally of 10% to 30%, which would echo previous halving years when Bitcoin entered a new bullish phase. This suggests that while September may bring consolidation, October has the potential for a strong recovery.
What to Expect: Bullish and Bearish Outlooks
Rekt Capital’s analysis shows that Bitcoin is consolidating around the $55,000 range, with the next key level to watch at $57,000. If Bitcoin breaks this resistance, it could lead to a stronger upward move.
However, caution is advised as the market remains uncertain. If Bitcoin retests the three-year resistance level near $46,000, a 19% pullback could bring the market closer to this support level. While this scenario is unlikely, it could pave the way for a significant rally in the future.
