Bitcoin (CRYPTO:BTC) had a challenging August, with its price dropping significantly at the beginning and end of the month.
Currently trading below $60,000, Bitcoin's price is expected to continue its downward trend into September, a month historically associated with bearish performance for the cryptocurrency.
On average, Bitcoin experiences a value decrease of 6.56% during September, according to Innokenty Isers, Founder and CEO of Paybis.
Isers stated, “September is a historically negative month for Bitcoin, as data shows it has an average value depletion rate of 6.56%."
Isers highlights that the sentiment remains negative, with Bitcoin trading between $49,000 and $66,000 so far.
However, he suggests that a potential interest rate cut by the Federal Reserve in September could change Bitcoin's trajectory.
“Should the Feds cut the interest rate in September, it might help Bitcoin re-write its negative history," Isers noted.
He explained, "This is because rate cuts generally lead to excessive US Dollar flow in the economy.This reduces the Dollar’s purchasing power, further strengthening the outlook of Bitcoin as a store of value."
The macro Market Value to Realized Value (MVRV) Ratio, which measures investor profit and loss, also indicates a potential buying opportunity.
Bitcoin’s 90-day MVRV stands at -4.8%, suggesting possible buying pressure.
Historically, an MVRV ratio between -2% and -12% has marked the start of recoveries and rallies.
Such trends were observed in mid-June 2023, early October 2023, and early July this year.
Investors may capitalise on Bitcoin's current low prices, potentially leading to an uptick toward the end of the month.
“If history repeats itself, BTC would be on track to note an uptick and prepare for a significant increase towards the end of the month,” the report mentions.
Two possible scenarios could unfold for Bitcoin in September.
The first scenario is a continuation of the bearish trend, with Bitcoin remaining under the $68,300 resistance level.
The second scenario involves a breakout above this level, possibly leading to a 22% rise and a new all-time high above $73,800.
This would require both an accumulation of Bitcoin and an interest rate cut.
However, Isers also warned that, "If Bitcoin’s price fails to breach even $65,000, consolidation under this barrier and above $57,040 is likely," which could delay any potential rally to October.
At press time, the Bitcoin price was $57,496.81.