Monthly Recap: Bitcoins suffers from the September effect

Bitcoin provided a negative return of 7.50% though September

Despite the growing concerns over the so-called “September Effect,” Bitcoin kicked off the month with a bang. The flagship cryptocurrency opened on September 1st trading at a low of $11,612.55 and quickly rose to a high of $12,086. The 4% upswing was quite encouraging as it defied all the FUD that was being spread about September. 

Moreover, Bitcoin’s stock-to-flow model also suggested that prices were going to close the month above $18,000, leading investors to pull the trigger and re-enter long positions. What came next was an 18.81% correction that saw the pioneer cryptocurrency plummet to a low of $9,813 within five days. More than $2.6 billion worth of long and short BTC positions were liquidated across the board during the sudden downturn. 

Bitcoin was able to recover some of the losses incurred as it rose to a high of $10,440.91 on September 8th. But later that day, it pulled back to retest the $9,800 support barrier. This time around, however, a significant number of buy orders were filled around this price level, allowing prices to rebound strongly. 

By September 19th, at 12:00 UTC, the bellwether cryptocurrency had risen nearly 14% to make a high of $11,179.90. Although many market participants thought that BTC was poised to advance further, the bears were able to get back control of the price action. As sell orders began to pile up across multiple cryptocurrency exchanges, Bitcoin was forced to retrace more than 9%, nearing the psychological support around $10,000 on September 23rd. 

The buying pressure behind Bitcoin rose from the grave throughout the last week of the month, allowing it to recover some of the gains lost. The spike in demand led to a 6.36% upswing that saw BTC close at a high of $10,779.63. As a result, investors incurred a monthly loss of more than 7.50%, adding another rough September to the books.

On the cusp of resuming the bull run

When looking at Bitcoin’s network activity, everything seems to point out that the uptrend is about to resume. The number of addresses holding 10,000 to 100,000 BTC continues rising, which is a clear sign of mounting buying pressure. Over the past two weeks, roughly seven whales have joined the network, which translates into billions of dollars’ worth of buy orders.

The technical aspects of BTC also look bullish. On the 3-day chart, the pioneer cryptocurrency seems to have bounced off the 50-three-day moving average, which has served as strong support during the last three multi-year bull runs. If history repeats itself, the recent rejection from this support level may have the strength to push Bitcoin towards $12,500 or new yearly highs. 
Given the high probability of a further advance, investors must pay close attention to the $10,000 support wall. If this price hurdle fails to hold, Bitcoin’s bullish outlook could be jeopardized. Under such circumstances, the next critical support level to watch sits around $9,000.