In Binance’s monthly report, August saw a continuous dip in cryptocurrencies, with the whole market value falling by almost 13% as a result of poor jobless figures and heightened recessionary fears.
Similarly, Bitwise Chief Investment Officer Matt Hougan stated that there’s a chance the elevated market apprehension would last until October.
Bitcoin and crypto markets could be set for another rough September
August saw some poor performance from a number of cryptocurrencies as Q3 ’24 draws to an end. According to Binance Research, the overall crypto market capitalization fell by 13.1% during the performance.
The unwinding of the Japanese Yen “carry trade” on August 5 and weaker-than-expected US macroeconomic data are two significant reasons for the market downturn.
Although net outflows from BTC ETFs totaled $142 million, Bitcoin saw an 11% monthly decrease. In August, altcoins like Solana and Ethereum saw declines of more than 24%. Throughout the month, Ethereum saw a decline in on-chain activity and a surge in outflows from the Total Value Locked (TVL).
A sharp drop in meme coin trading was also seen by Solana, which led to a 27.7% drop in the volume of decentralized exchange trades conducted on its blockchain. Binance hypothesized that the decline in trade volume might have been the consequence of investor anxiety stoked by rug pulls that involved multiple projects on its network.
What to expect from crypto in September
In September, cryptocurrency prices might follow through on their August performance as the market attempts to rebound from a turbulent month.
Bitwise Chief Investment Officer Matt Hougan claims that September is one of just two months where the average return on Bitcoin is negative.
According to Hougan, since it started trading in 2010, Bitcoin has decreased in value by 4.5% on average in September. This is mostly because people are feeling more pessimistic about the whole investment market.
“There are other assets besides Bitcoin that are depressed about going back to school. September is the first month since 1929 when stock returns have been greater than gains, according to Hougan.
With uncertainty roiling the overall market, Bitcoin has dropped more than 2% this month. Before rising on Monday, the asset’s price fell below $54K on Friday, the lowest since August 5.
But Matt Hougan points out a few things that can cause the asset’s fortunes to turn around. These include the approaching presidential election and the potential rate drop by the Federal Reserve (Fed) later this month by 50 basis points.
September could witness further volatile price swings in the cryptocurrency market before a comeback in October, which has historically been a good month for Bitcoin.
Bitwise Head of Alpha Strategies Jeff Park noted that when held from October to April as opposed to May to September, Bitcoin generated a “staggering” return of 13,656,203% vs. +619.5%.
