After a slight decline over the weekend, Bitcoin [BTC] briefly climbed to above $55,500 on September 9, causing a 4.26% decrease for the just-ended week.
Although the decline was not as significant as the 11% drop in the previous week, the closing price was somewhat disappointing, marking the cryptocurrency's continuous weekly decline since June 10.
Observers attribute last week's decline to the US non-farm payrolls data and the negative flow of Bitcoin ETF. The latest US employment report shows that the US economy added 142,000 non-farm jobs in August, below the expected 160,000.
Final week inflation data before the FOMC meeting.
This week, market participants welcome more US economic data that may influence the Federal Reserve's interest rate decision on September 18 and the overall market trend.
The US Bureau of Labor Statistics will release the August Consumer Price Index report on Wednesday, September 11, and the Producer Price Index data on Thursday.
After the debate between US presidential candidates Kamala Harris and Donald Trump on Tuesday, the Federal Reserve released the aforementioned data. Prior to the debate, analysts at Bernstein pointed out that the election result and the nature of the regulatory environment were not reflected in the current market.
If Democratic candidate and Vice President Harris is elected president, the price of Bitcoin could fall into the range of $30,000 to $40,000.
On the other hand, if Trump wins in November's election, it could push Bitcoin to break through $80,000 in the fourth quarter.
The halving theory is still in effect.
Bitcoin reached its historical high for the year before the halving, but trading has been sluggish since. However, based on the price trend of previous halvings in previous years, Bitcoin is expected to continue to rise.
Bitcoin has continued to rise in October, November, and December 2016, as well as in 2020.
It is worth noting that despite the debut of spot Bitcoin ETF and the halving event in March pushing up the price of Bitcoin relative to gold, the price of Bitcoin relative to gold has been hitting new lows this year. This continued price weakness could push the BTC/gold ratio to 15:1.
Outlook for the crypto market.
In addition to seasonal factors, the most important thing is to pay attention to the specific situation of the current market. In this way, I am beginning to understand the reason behind the weakness of cryptocurrencies in September this year.
The market dislikes uncertainty, and there is currently a lot of uncertainty in the market.
The US presidential election will have a significant impact on cryptocurrencies, with the current outcome being uncertain. I believe that the market will struggle to stabilize until we have a clearer understanding of our future leadership and policies.
There is intense debate over the timing and magnitude of the Federal Reserve's interest rate cuts. While it is widely believed that loose monetary policy is imminent, investors are readjusting their bets: the likelihood of a 50 basis point cut in September has decreased, but the likelihood of a cut of over 125 basis points in December has increased.
The flow of funds in ETFs is mixed. Although there has been a decrease in the inflow of funds into bitcoin and ethereum ETFs (US bitcoin ETF just experienced the longest net outflow period since its launch in January), if you observe carefully, you will find that investment advisors are adopting bitcoin ETF at a faster pace than any new ETF in history.
My prediction is that as this uncertainty dissipates in October and November, we will see a significant rebound in cryptos. This aligns with historical trends, which may be a coincidence or may not be. In any case, please be prepared.