The month of September has begun on an expected bearish momentum as correlated by historical patterns. September is known for a significant decline in not just the price of Bitcoin, but the broader crypto market. On that note, the price of the flagship asset, Bitcoin, saw a downtrend today, crashing to the $57k level.
This has reduced the general market confidence as investors’ emotions hover in ‘fear’ as depicted by the crypto fear and greed index data. Consequently, the total crypto market cap slid by 1.77% to $2.01 trillion with other major assets like Ethereum, Solana, XRP, and Doge recording notable losses.
Reasons Why the Bitcoin Price is Down Today Sep 2
As investors wake up to a ‘bloodbath-like’ market today, the one question that they sort the answer to is ‘Why is Bitcoin down today?” We have observed the market and patterns to understand it. See the reasons below.
Bitcoin Falls Below Support Level
Over the past week, the price of Bitcoin has consolidated between the $58,000 and $63,000 levels, establishing a support at $58,450. However, on September 1, the price of the asset fell below this level to trade as low as $57,400. The break below this support triggered a wave of bearish movement.
Popular crypto analyst, Rekt Capital, shared his analysis of this trend earlier today on X (formerly Twitter). According to him, for Bitcoin to experience an uptrend, it has to close the week above the $59k mark. However, if it continues to trade below the important support level, it could set the grounds for a further downtrend.
“Ideal close would even be ~$59000 to get BTC above the blue Higher Low dating back to early July,” he says.
Source: Rekt Capital/X Decline in Exchange and On-chain Activities
Another reason for the Bitcoin price crash today is the notable decline in exchange and on-chain activities. A recent analysis by prominent crypto community member, Ali Martinez, points to a significant reduction in exchange-related and on-chain activity. According to him, a decline in this metric reflects a decreasing investor interest in Bitcoin and also a reduction in network usage.
Moreover, Ali also pointed out that there has been a reduction in the capital flows for major assets such as Bitcoin. The Bitcoin capital flows fell below those for stablecoins. This signifies a cautious approach by investors, shifting their portfolios from volatile assets to more stable ones.
Source: Ali Charts/X
However, he noted that investors are shifting to stablecoins to take advantage of future buying opportunities, meaning they might prefer to buy future Bitcoin dips. This move often indicates a defensive stance taken by investors during times of market uncertainties.
Meanwhile, Bitcoin experienced a sharp decline earlier today. According to data from CoinMarketCap, the price of BTC traded at $57,755 at the time of writing, representing a 0.60% drop in the last 24 hours. Additionally, the coin saw an increase in its one-day trading volume. As per on-chain data, Bitcoin’s trading volume over the last day skyrocketed by 76% to $26.32 billion, signifying increasing selling activities.
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