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Should you just wait for October to trade Bitcoin?

  • Traders have been waiting for a breakout as Bitcoin remains rangebound between $29,000 and $30,000.
  • A report from Ark Invest suggests that Bitcoin’s low volatility in July could lead to significant price action in the near future.

This is not news to anyone watching the crypto markets lately.

However, there are factors that traders might not be considering, such as historical price action in August and September and monetary policy effects on cryptocurrency markets.

  • The report points out that Fed tightening could indicate price deflation, with a potential lag effect.
  • China’s exporting of deflation adds to the deflationary pressure.

This lagging effect of Fed tightening could coincide with Bitcoin’s halving rally in 2024 – 2025, potentially leading to a more subdued bull run compared to previous cycles.

However, some analysts believe that the macroeconomic conditions will become more favorable for Bitcoin, as the Fed is finishing its tightening cycle and the next halving event is approaching.

  • Morpher CEO Martin Froehler expects the 2023 Bitcoin rally to resume.
  • Kyle DaCruz, director of digital assets product at VanEck, believes Bitcoin’s scarcity and the growth in the money supply could drive a continued rally.

Historically, August and September have been the worst months for Bitcoin’s price performance.

  • From 2011–2022, August has only seen positive performance five times.
  • September has seen positive performance in only four out of 12 months.

Despite the flatlining of Bitcoin’s price in recent weeks, there is a belief that the worst of the bear market may be behind us.

This suggests that the largest gains for Bitcoin could be ahead in 2024 and 2025. However, if this coincides with deflation and a potential recession, downward pressure on Bitcoin’s price could offset some of the gains in the next bull cycle.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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