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Bitcoin (BTC) looks set to post its best September performance in a decade, rising above $65,000. This unusual rise in prices can be attributed to several major factors.
The reasons behind Bitcoin’s impressive gains in September
Historically, September has always been the worst month for Bitcoin in terms of price performance. However, the leading cryptocurrency is now on track to record its best September performance in at least a decade, driven by several macroeconomic developments.
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On September 18, the US Federal Reserve began its rate-cutting cycle for the first time in four years, cutting interest rates by 50 basis points in response to slowing inflation and rising unemployment.
The interest rate cut immediately affected risk assets, including Bitcoin, whose value has risen more than 10% since the cut. In comparison, the average September Bitcoin price decline over the past decade was 3.45%, according to the chart below from CoinGlass.
In accordance with the Fed’s decision, the European Central Bank (ECB) and the People’s Bank of China (PBoC) cut borrowing costs to stimulate their economies. This has pushed the price of BTC towards its previous highs.
The Bitcoin halving is another major factor that could now begin to show its impact on the price movement of the digital asset. Bitcoin underwent a halving earlier this year in April, which reduced block confirmation rewards for miners from 6.25 BTC to 3.125 BTC.
Previous data suggests that halvings have typically been a bullish catalyst for Bitcoin due to the resulting scarcity of supply. For example, in May 2020, the price of BTC rose From about $8,900 before the halving to more than $64,000 by April 2021 – an 8-fold price rise in less than a year.
Meanwhile, Bitcoin exchange-traded funds (ETFs) continue to see growing interest from retail and institutional investors alike, recording $365.57 million in total daily net inflows on September 26, the largest since late July. Since its launch, the cumulative net inflow of Bitcoin ETFs now stands at $18.31 billion.
Cautious optimism is the key to riding the Bitcoin wave
While Bitcoin appears to have shaken off its usual September decline, it is worth noting that the leading digital asset still needs to overcome some difficulties. important Price levels before they reach a new all-time high (ATH).
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As mentioned earlier, Bitcoin’s Relative Strength Index (RSI) He falls Below 80 on the monthly chart, indicating that the cryptocurrency’s bullish momentum may fade after an enthusiastic buying spree.
In addition, recently a report Via cryptocurrency exchange, Bitfinex noted that despite Bitcoin’s recent upward movement, it must decisively overcome a strong resistance level of $65,200 to continue its positive momentum. The good news for the bulls is that Bitcoin held steady at $65,674, up 2% over the past 24 hours.
Featured image from Unsplash, charts from CoinGlass.com and Tradingview.com