Will September Spark a Crypto Bull Run?

In early fall 2023, the crypto market experiences pressure from both objective and subjective factors as September is traditionally considered a “red” month. But making predictions based on stereotypes is a questionable approach, so the CP Media team asked experts who rely on objective data from fundamental and technical analysis for their comments. 

Dmitry Noskov, Expert at StormGain, listed what he believes to be the main objective factors that will put pressure on Bitcoin’s exchange rate and, consequently, the entire crypto market in September: 

1. In the minutes of the Fed’s last meeting, published in mid-August, the agency’s representatives mostly favored a further increase in the key rate. Markets reacted negatively as the rate hike intensified the capital flow from risky assets into Treasury bonds. The annual bond rate is now at 5.4%, the best in 22 years. At the same time, Bitcoin spot trading volume in July totaled just $515 billion, compared to $1.2 trillion a year ago. Fed’s further rate hike could lead to more negative trends in the crypto market.
2. A more negative scenario will be played out in case Binance and Changpeng Zhao are indicted by the U.S. Department of Justice. At least, this is what the American media is predicting. Bitcoin in such a case will be under pressure, and its value may fall to the $20,000 mark.
3. A chance to obtain permission to issue spot Bitcoin and Ethereum ETFs in the U.S. is an ace up the crypto market’s sleeve. Various estimates suggest that if exchange-traded funds are launched, the inflow of institutional capital over the next six months will range from $5 billion to $10 billion, while Bitcoin will trade within the range of $50,000 to $120,000. 

Alexandra Korneva, Co-Founder and Head of cross-chain aggregator Rubic, shared the key trends seen on the platform she runs: 

1. L2 protocols are gaining more and more popularity. Several new and interesting networks have been launched in the last couple of months, and this trend will continue. Since April this year, their share has gone from zero to 18% of the total transaction volume of all our 60+ networks.

We actively work with testnets and see several other new networks scheduled for release in the next couple of months that could potentially attract significant attention.

What adds to the whole story is the hype surrounding potential drops from the new networks. Current trading activity suggests that the market is somewhat frozen, and only airdrop hunters continue to actively transfer assets from one network to another. Even unusual transactions happen here — from zkSync to Linea, then to Polygon zkEvm, etc.

2. If we consider the whole market, we can emphasize that there’s increasing pressure on CEXs from regulators, due to which exchanges tighten their rules and simply halt their operations in some countries. It’s also worth noting that regulation is coming to the DEX market as well; for example, trading on Uniswap is restricted for American users. 
3. There’ll be a major conference in Singapore in September, and we expect more positivity from the crypto community and generally expect Hong Kong and Asia to develop as a new source of traffic and potential for projects. 

Evgeny Tarasov, Head of Content at CP Media, cites several other factors that help predict an overall decline in crypto market cap in September: 

1. Despite Grayscale’s victory in court over the Securities and Exchange Commission (SEC), the regulator has postponed a decision on applications to issue spot Bitcoin ETFs from WisdomTree, Invesco Galaxy, Valkyrie, VanEck, Bitwise Asset Management, and Fidelity. This process could drag on until the end of October. 
2. A stereotype that September is a “red” month has some validity. According to CoinGlass, monthly returns of BTC at the end of September have been in the red nine times in the last 13 years. Moreover, the streak of negative returns has been in place for the past six years. 
3. The inflation rate in the U.S. is still above 3%, so the probability of further key rate hikes by the Fed remains high, as confirmed directly by the agency’s representatives.

“The listed factors will put pressure on BTC quotes. Many analysts agree that the growth should be expected no earlier than mid-October, which will be facilitated by the potential softening of the Fed’s monetary policy and the anticipation of the SEC’s decision on issuing spot Bitcoin ETFs. 

We should also consider the fundamental indicators of the Bitcoin network, which are indicative of investor sentiment. In particular, at the end of August, the network recorded a new high of active addresses — more than 48 million, according to IntoTheBlock. In addition, Bitfinex analysts reported that over 40% of BTC has been inactive for more than three years. These factors, as well as recent BlackRock’s acquisitions, point to optimistic expectations of institutional and retail investors regarding the first cryptocurrency. However, we’re talking about long-term forecasts in this case, so bearish trends are likely to persist in the crypto market in September,” summarizes Evgeny.