Bitcoin (BTC) is on course to end its six-year losing streak in September, but a slight drop ahead of a possible federal government shutdown might threaten this month’s advance.
The largest crypto by market capitalization traded at $26,800 Friday afternoon, up 3.2% this month. Despite briefly touching $27,400 on Thursday, BTC has fallen 1.6%.
As BTC began September at $26,000, extending this weak price action into the weekend could threaten its temporary positive monthly return.
As market players anticipate futures-based ETFs to launch early next week, Ether (ETH) remained relatively steady at $1,660.
Ripple’s XRP, Solana’s SOL, and Tron’s native token TRON outperformed the digital asset market by 3%–5%. The CoinDesk CMI fell 0.5%.
How does the government shutdown affect crypto?
“The oppressive macro uncertainty is still a major headwind,” Noelle Acheson, Crypto Is Macro Now newsletter author and macro analyst, said Friday. Yields have reached multi-year records in the US, UK, Germany, and Japan, indicating turmoil in bond markets worldwide.
She added that the U.S. government shutdown adds uncertainty and that Q2 consumer spending growth was revised lower, suggesting consumers may be less robust to tighter financial conditions.
A Friday market analysis from consultancy firm Asgard Markets stated, “As scary as this may sound, during the 21 government shutdowns [in the past], the S&P 500 rose 55% of the time, generating an average return of 0.3%.”
NYDIG, a digital asset investment firm, claimed the government shutdown could postpone regulatory decisions because the SEC staff will be drastically reduced.
In the paper, NYDIG head of research Greg Cipolaro stated, “A spot bitcoin ETF will have to wait until after SEC employees come back from a potential furlough.”
What’s next for bitcoin’s (BTC) price?
In contrast to the stock market crash, crypto markets held strong. Asgard expects risk assets to perform well in Q4 despite the economic environment.
“BTC and ETH are now trying to break upwards outside of their range established in the last month and a half,” Asgard stated. As long as BTC does not retrace below 26,000, we expect a short-term move between $28,500 and $30,000.
In a CoinDesk TV interview, Matrixport Head of Research Markus Thielen stated that October has historically been a bullish month for bitcoin.
He pointed out that in the past decade, on eight occasions, primarily in October, the market saw positive gains, averaging around 22%. He also mentioned that Bitcoin would experience a significant upswing when interest rates become more accommodating.
Thielen also said that Marathon Digital and other bitcoin miners are operating more efficiently this quarter.
Marathon Digital, according to Thielen, anticipated that mining expenses would rise from $24,000 to $29,000 per bitcoin after the halving.
He finalized, “Nevertheless, we need to really rally above 30,000.”