Is Bitcoin Heading For A Major Drop? September Slump with October Rally Analysis
Bitcoin has recently broken out of its market structure, raising concerns about how much lower it could go in the coming months. September, a history-bearing month, has many wondering if a significant downturn is looming on the horizon. Rect Capital, the famous crypto analyst analyzed the past trends, current market conditions and the upcoming October, traditionally a rare month.
The historic fall of September
According to Rect Capital's analysis, Bitcoin's 7% drop in September is consistent with previous years when the market experienced a steady decline. In the year In 2022, Bitcoin fell by 7% in September, and similar single-digit losses were seen in 2021, 2020 and 2018.
This shows that September often leads to depression, the current fall is no exception. However, in extreme situations like 2014, Bitcoin experienced sharp drops such as 19% decline during bear market.
Although it is slowing now, the fact that 2024 is a half-year suggests that this downward pressure may not be as severe as it was in the half-year.
Half year effect
In addition, Rect Capital is less likely to decline significantly during semi-annual periods such as 2016 and 2020. Bitcoin has shown mostly small movements up and down over the years. A 7% decline seems more likely, which could bring Bitcoin to $55,000.
Even in extreme scenarios, such as a 13% or 19% decline, Bitcoin could fall to $48,000 or below. However, unless unexpected economic events trigger a sell-off, such severe declines in half-years are rare.
Bullish view of October
Despite September's bear story, October is usually one of Bitcoin's best months. Historically, Bitcoin has shown significant gains in October, returning over 20% on average. In the year In 2020, half-yearly as of 2024, Bitcoin rose 27% in October, giving hope that the current downtrend may end soon.
Depending on historical patterns, October could bring a 10% to 30% rally, matching the last half-year as Bitcoin begins a new crash phase. This suggests that while September may bring consolidation, October holds the potential for a strong recovery.
Bullish and bearish view of what to expect
Rect Capital's analysis shows that Bitcoin has been consolidating around $55,000 and the next key level is $57,000. If Bitcoin breaks this resistance, it could be headed for a strong move to the upside.
However, caution is advised as the market is uncertain. If Bitcoin retests the three-year resistance level near $46,000, a 19% retracement could push the market to this support level. While this scenario is unlikely, it could pave the way for a significant rally in the future.
