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- Last week saw the largest outflow from institutional crypto funds since the 2022 bear market, with ETFs also steadily losing money as Bitcoin failed to hold above $60,000.
- This week brings the consumer and producer price indices, just over a week before the Fed makes its decision on interest rates, which could determine BTC’s trajectory.
Bitcoin started the second week of September just above $54,000, but it has since recovered slightly, gaining 2% overall in the past 24 hours as we head into a defining ten days.
BTC trades at $55,277 for a $1.09 trillion market cap as the volume recovered, shooting up 50% after the cyclical weekend slump. BTC set the tone for the rest of the market, with the overall market cap inching up by 1.65% to hit $1.96 trillion. Other major coins like Ether, BNB, Dogecoin, TRON and, ADA also gained around 2%, with Toncoin the outlier with a 9% jump.
One of the key things to watch for BTC this week is the anticipated inflation data, which will be the last before the Federal Reserve holds its meeting on September 18 to decide on whether to lower or raise interest rates.
Analysts have cautioned investors to expect volatility when the Consumer Price Index and the Producer Price Index are announced on Wednesday and Thursday this week, respectively. Lucy Hu, an analyst with Hong Kong-based digital assets management firm Metalpha commented:
It seems the lower-than-expected payroll data is dominating the market sentiment at the moment, as broad assets declined since Friday’s data. We expect the crypto market will remain highly volatile leading to the next Fed meeting.
Most analysts expect the Fed to be modest in its decision next week, with a vast majority expecting a 25 basis point cut, although this could change depending on the price indices data on Wednesday and Thursday.
A Bear’s Month—Can September Redeem Itself?
Yet another significant factor that analysts say could play a major role in September’s cyclically bearish nature. In the past years, the crypto industry has been battered in September, and this year has been no different. Bitcoin, for instance, started the month at $59,600, but it has dipped 7.2%.
BTC has, however, recovered slightly over the past day, giving analysts confidence that this year could be different. Caleb Franzen, a popular analyst, told his 50,000 followers on X that if the top crypto can stay above $54,500, it could regain some momentum.
If price can stay above $54.5k, I'm looking for a break above this green zone to see if #Bitcoin can regain some upward momentum. pic.twitter.com/70MsDWLIuk
— Caleb Franzen (@CalebFranzen) September 9, 2024
Ed Hindi, the chief investment officer at Tyr Capital, is just as optimistic, telling one outlet:
Although September is historically a negative month for BTC, the combination of a Fed [United States Federal Reserve] rate cut and a relatively robust US economy could surprise the bears. We believe the chances of BTC settling above $60,000 to be higher than the chances of it settling below it.
“Overall, the macroeconomic indices, spot Bitcoin ETF adoption, and favorable hash rate might make September a relatively better month for BTC this quarter,” adds Innokenty Isers, the founder of the Paybis exchange.
If Bitcoin is to redeem itself in September, it will halve to nip the outflows in the bud. Last week, institutional crypto funds lost over $ 600 million in outflows, the highest outflow since 2022.
Even the ETFs have been bleeding. Since August 27, the ETFs have been haemorrhaging, with six out those eight days seeing over $100 million in outflows, a far cry from the days of record inflows earlier this year.
