Bitcoin faces near-term uncertainty despite strong gains in September

Share this article

Despite Bitcoin’s rally near $66,000, key indicators suggest it is not ready for a new all-time high. Stable China-focused data and low retailer participation point to a slowdown, while broader global interest remains subdued.

Although institutional investors have fueled the recent Bitcoin price surge, the situation in China paints a different picture. Stablecoins like USDT are trading at a discount in China, which generally indicates bearish sentiment. This lack of demand contrasts with inflows into U.S. spot ETFs, suggesting that broader global investor interest in crypto may be further muted.

Interestingly, China has been a focal point for global markets, with recent economic stimulus measures from the Chinese government leading to a historic stock buying frenzy.

According to a tweet According to Kobeissi Letter, Chinese ETF call volume reached 3.4 million contracts last week, the highest since 2020. ETFs like $FXI and $KWEB jumped 18.5% and 26.8 %, while China’s CSI 300 index recorded its best week since 2008 with a peak of 15.7%. . Despite this rise in Chinese stocks, Bitcoin’s price is still struggling to align with broader market optimism.

Participation by retail investors, a key indicator of market euphoria, remains subdued. During past bull markets, retail activity has exploded, with Coinbase being the most downloaded app. Currently, Coinbase app ranking 417th, well below its peak positions in previous rallies.

On-chain data shows that the supply of short-term holders is also declining, indicating that retail investors are not yet accumulating. Weaker retail activity could indicate that Bitcoin’s rally may still have room to grow before reaching the top.

The price of Bitcoin fell almost 3% today as escalating tensions in the Middle East, particularly the Israeli airstrike on Beirut, sent shockwaves through global markets. In times of increased geopolitical uncertainty, investors tend to seek safer assets like gold and government bonds, avoiding risky investments like crypto.

Additionally, U.S. traders are bracing for key economic updates, including jobs data and Fed Chairman Jerome Powell’s interest rate guidance released earlier in the day. Powell stressed that the Fed is not on a fixed path and will assess conditions as they evolve, with potential rate cuts based on incoming data. With traders to expect In the face of a potential rate cut of 25 basis points, this cautious approach has left the market in limbo, contributing to continued uncertainty.

Regardless of Bitcoin’s recent decline, the token is still expected to close September with a 7% gain, its best performance since 2013. according to to CoinGlass metrics. Historically, October has been a strong month for Bitcoin, earning it the nickname “Uptober” due to its consistent positive returns.

Share this article