Recent findings presented by K33 suggest a potential downturn in the cryptocurrency arena, focusing distinctly on Bitcoin (BTC). While BTC’s current position is marginally above its critical $112,500 support level, there’s cause for concern among altcoins should this threshold be breached. The K33 report sheds light on factors previously unnoticed, hinting at a probable decline bringing Bitcoin prices below $100,000.
What Predicts Cryptocurrency Decline?
In a comprehensive study, K33 Research outlines a dire scenario for those in the crypto investment space, cautioning against ignoring the signs of a potential recession. September is positioned as a focal month due to debates on the Federal Reserve’s autonomy and oft-ignored macro triggers. Vetle Lunde, K33’s Head of Research, pinpoints these as significant overlooked elements impacting the current market.
Describing an ongoing phase of consolidation, analysts suggest stagnation more aptly defines the current market mood. With macroeconomic factors looming, there is anticipation that Bitcoin might not maintain its six-figure value beyond this month. Historically, September has recorded an average slump of 4.6%; this recurrence is intertwined with controversies, such as the recent attempt to unseat a Federal Reserve committee member, Cook.
What Does September Hold for Cryptos?
A Federal court’s recent decision to defer declaring tariffs illegal until October enhances Trump’s leverage in negotiations. Tariffs’ impact on inflation is evident, with the upcoming August reports likely to further expose this trend.
Some Federal Reserve members hold a positive view, anticipating tariffs will affect inflation over the next half year. However, Lunde, expressing concerns about macroeconomic conditions, liquidated a portion of his BTC investments recently.
With macro risk factors becoming stark, Lunde predicts increased investor leanings towards selling. He emphasized the sway of shifting funding rates between neutral and negative, indicating significant market tensions.
Despite these headwinds, Lunde retains optimism about Bitcoin’s long-term prospects, identifying $101,000 and $94,000 as strong support levels. He is also hopeful about factors such as monetary expansion, possible Federal Reserve rate reductions, and blockchain-based inclusions in retirement plans as drivers of sustained crypto potential.
“In the long run, honey badgers ignore global turmoil and restrictive trade conditions.”
Such resilience among long-term investors may counteract the current month’s selling pressures, maintaining optimism amidst the challenges.
