Bitcoin is set for a sub-$50K correction in September – analysts
Bitcoin could extend the summer crab ride into September with a correction below the key psychological mark of $50,000.
The price of Bitcoin (BTC) has struggled to recover from its more than two-week downtrend. It has fallen 12% since August 26 to trade at $56,133 at 11:24 am UTC, according to Cointelegraph data.
BTC/USD, 1-month chart. Source: Cointelegraph
This dynamic Bitcoin may prepare a correction below $50,000, according to the head of content of the Bitcoin exchange, Cyrus Ip.
IP told Cointelegraph:
“The data suggests that this is the path of least resistance when things are stagnant. However, if a new stimulus or headline emerges, especially in a low liquidity environment, these things can change quickly.”
Round psychological numbers like $50,000 invite significant investor attention. If the price of Bitcoin falls below $50,000, Crypto investor sentiment could take a big hit and invite lower lows.
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Bitcoin holds high support at $55,000 and $52,000
Based on the latest onchain exchange data, Crypto investors seem to be taking a breather.
Following August's brutal $510 billion crypto market selloff, open interest and trading volumes for both Bitcoin and Ether (ETH) have continued to decline, according to a September 4 research report by BayBit and Block Scholes:
“Open demand for private options is on a steady downward trend. Additionally, we observe a parallel downward trend in trading volumes.”
Bybit Perp BTC and ETH Open Interest. Source: Bybit and Block Scholes
While this Bitcoin correction could set a level below $50,000, BTC still holds two significant support levels, Ip noted.
Regarding the price targets, if you look at the support levels, there are still known support levels of $55,000 and $52,000 before we reach $50,000.
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ETF flows and historical data threaten BTC below $50,000 in September
September is historically the month with the lowest volatility, with average Bitcoin returns of -4.69%, making it the weakest month based on average returns, according to CoinGlass data.
Bitcoin monthly returns percentage. Source: CoinGlass
The historical performance, with the speed that can be reduced in the US, before the real bull rally, can prepare a correction below $50,000, according to Bitfinex analysts.
Analysts told Cointelegraph:
“This is not an arbitrary number, but the average bull market correction has also decreased as the highest percentage return of the cycle has decreased by around 60-70% per cycle.
Negative Bitcoin exchange-traded funds (ETFs) from the US space are putting pressure on the price of Bitcoin.
Bitcoin ETF flow (USD, million). Source: Farside Investors
US ETFs recorded seven consecutive days of net outflows, with outflows of more than $211 million on September 5, according to data from Farside Investors.
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