According to CoinDesk, Bitcoin fell nearly 1.2% to around $57,500 on the Labor Day holiday in the U.S., with other cryptocurrencies like Solana and Dogecoin experiencing losses up to 5%. This decline extends Bitcoin's seven-day drop to over 10%, reflecting a broader downturn in the crypto market.
Market analysis indicates a historically bearish trend for September, with Bitcoin typically seeing a monthly decline of 6% on average. Major cryptocurrencies such as Solana, BNB Chain’s BNB, XRP, and Cardano’s ADA fell as much as 3%, while Dogecoin led the losses among the largest cryptocurrencies with a 5% drop. The CoinDesk 20 Index, which tracks the largest tokens, fell 1.88%.
U.S.-listed exchange-traded funds (ETFs) tracking Bitcoin posted total net outflows of $175 million on Friday, marking a four-day losing streak. Ether ETFs had zero net inflows or outflows despite $173 million in trading volume. Traditional markets in the U.S. remained closed due to the Labor Day holiday.
Some traders noted that Bitcoin's loss aligns with the bearish seasonality observed in September. However, they suggested that potential interest-rate cuts by the U.S. Federal Reserve could alter this trend. Innokenty Isers, founder of crypto exchange Paybis, mentioned that September is historically a negative month for Bitcoin, with an average value depletion rate of 6.56%. He added that if the Federal Reserve cuts interest rates in September, it might help Bitcoin overcome its negative trend, as rate cuts generally lead to an increased flow of U.S. dollars in the economy, strengthening Bitcoin's outlook as a store of value.
Seasonality refers to the tendency of assets to experience regular and predictable changes throughout the calendar year. While these changes may appear random, they can be attributed to factors such as profit-taking around tax season in April and May, which causes drawdowns, and the generally bullish 'Santa Claus' rally in December, indicating increased demand. Isers also noted that macroeconomic indices, spot Bitcoin ETF adoption, and favorable hashrate might make September a relatively better month for Bitcoin this quarter.
