Following a significant sell-off in early August, Bitcoin [BTC] has been struggling to maintain its value above $60K. The lackluster price movement has continued into the first half of September.
As per a report from Glassnode, this stagnation in price has resulted in a “diminished interest in trading” among BTC traders. The report pointed out a decrease in cryptocurrency exchange volumes, stating,
“It is evident that the average monthly trading volume has dropped well below the levels seen throughout the year. This highlights a decrease in demand from investors and a reduction in speculative trading within the current price range.”
The report emphasized the pivotal role of cryptocurrency exchanges in determining prices and speculative activity. Therefore, a decline in trading volume on these platforms signifies weakened demand from BTC traders and investors.
Increasing Selling Pressure on BTC
Glassnode also observed an overall selling pressure in the spot market during August and the entire quarter.
By utilizing the spot CVD (Cumulative Volume Delta) metric, which monitors the net difference between buy and sell volumes, it was predominantly negative in Q3.
Bitwise attributed the lackluster performance and sentiment of BTC in Q3, especially during September, to seasonality.
The asset management firm illustrated BTC’s historical trend of negative returns during August and September.
Nevertheless, Bitwise pointed out a common pattern of poor summer performance across various assets, as investors tend to follow the ‘sell in May and go away’ adage.
Interestingly, historical data indicates that October has typically been a strong month for BTC, with an average return of around 30%.
If this historical trend holds, it could signify a robust recovery for BTC in Q4. However, according to QCP Capital, a crypto trading firm, there is a potential caveat.
QCP Capital suggested that the recent Trump-Harris debate, which showed no clear frontrunner among the candidates and murky policy stances, might trigger a risk-off event.
“The lack of a distinct leader in the upcoming election, along with uncertain policy positions from both parties, increases the likelihood of a risk-off movement in risky assets as we near Election Day.”
As of the latest update, BTC was being traded at $57k, just a few hours before the release of the US August CPI (Consumer Price Index) data.