Barring a very big surprise, bitcoin should end September with a red candle. As an illustration, its current price is down 13.5% compared to 30 days ago. But, October should be different. So, what to expect from Bitcoin for this period?
During the month of September, many events followed one another at the bitcoin level. First, the ” King Coin Set a quarterly record of $ 52,853.76 after repeatedly failing to overcome the psychological $ 50,000 mark. It was believed to have broken the ” curse Of September. This was without counting on the over-liquidation of leveraged positions that had plunged BTC towards $ 42,000 in the day of Sept. 7.
Then, a period of calm had set in for a week with a slight revaluation of bitcoin. Evergrande’s fear of default had tarnished that calm by creating a panic situation. Bitcoin then lost its modest gains. The Fed had finally given hope but the Chinese authorities create a FUD with the ban on cryptocurrency transactions.
Bullish bitcoin: the historic comfort of October
Source: Twitter / @ CryptoMichNL
When we try to analyze in depth the sell-off of September, it is not so bad considering the current price of BTC. Historically, this month has been bearish for bitcoin. Over the past 12 years, the price has slipped on average by 7% in September.
This year’s decline is also severe, but its price has not fallen below $ 37,000. If it had come close to $ 37,000, bitcoin could say goodbye to crossing $ 100,000 at the end of the year.
The bill could have been much higher. A Chinese crackdown announced a day before the expiration of more than 70,000 bitcoin options contracts is not at all innocent. Fortunately for bitcoin, the market is resisting and trying somehow to defend the upper bound of the $ 40,000- $ 44,000 range.
Based on the time series, October should be different for Bitcoin. Over the past 12 years, its price has taken an average of 31% each October. From 2013 to 2020, BTC only drops twice in October. In 2018, bitcoin fell 3.83% in October but in a particularly bearish year for cryptocurrency after the bull run of 2017. In 2018, 9 months out of 12 posted a negative monthly performance. The same observation was made in October 2014 where bitcoin lost 12.95%. That year, 8 out of 12 months show a monthly close in the red.
Morgan Stanley doubles its bitcoin position via Grayscale
The American mega-bank seems to smell the bullish shadow of Bitcoin. She took the opportunity to increase her exposure to bitcoin through the purchase of Grayscale shares. Indeed, according to a report by the US Stock Exchange Authority (SEC) published on September 27, Morgan Stanley owned 58,116 shares of Grayscale Bitcoin Trust as of July 31. Its exposure has grown 105% since April.
In fact, Morgan Stanley isn’t the only institutional player that has increased its bitcoin exposure through Grayscale. According to an editorial from Cointelegraph, it was learned that Ark Investment bought nearly 450,000 more Grayscale Bitcoin Trust shares, bringing its total to 8.3 million shares (GBTC).
On-Chain data confirms the trend of accumulation
Institutionalists still maintain hope for a bullish bitcoin in the future. Carried by MicroStrategy whose bitcoin portfolio amounts to approximately 109,000 BTC. Institutionals are not letting go of Bitcoin. A tweet from the crypto analyst under the pseudonym Bitcoin Archive elucidates this trend towards accumulation:
The decline in the supply of #Bitcoin on exchanges has been the dominant trend for almost 2 years – briefly interrupted by the correction in May.
We are firmly in a period of accumulation.
There is no immediate sign of change.
Some important points to watch out for!
At the technical level, bitcoin needs to seize $ 43,600 as support to maintain the bullish divergence. Any sign of weakness and inability to sustain this support will be damaging to the long term bullish trend.
Regarding fundamental analysis points, trader and crypto expert Lark Davis delivered some elements that may affect the price of bitcoin during the month of October.
Potentially important catalysts include
- Ethereum merger
- The purchase of BTC by a large corporation and the reactivation of the corporate treasury FOMO.
- Regulatory clarity in the United States
- Ripple wins lawsuit
Possible reasons that will invalidate this
- No BTC ETF
- SEC crushes exhanges and stable currencies
- EverGrande contagion
- The Fed’s tapering is bringing down the stock markets, the big fortunes are in cryptocurrencies now, and they’re not afraid to sell for cash.
Source: Twitter @TheCryptoLark