Bitcoin (BTC) is just one step away from breaking the tradition of closing September every year with a drop. If the price closes above $20,080 tonight, September of 2022 will close in the green by a small margin. However, it faces a potential sell-off next month as the macro climate weakens and on-chain data point to low interest.
Bitcoin just had a September, here are the key metrics to watch
Bitcoin is about to close September with a double-digit loss compared to August. As the market sentiment continues to deteriorate, it needs to maintain a vital support level to avoid a major correction. BTC is currently consolidating around the $19,000 support level. Investors have noted the weak price action of the top cryptocurrency in recent weeks.
Market sentiment towards Bitcoin remains negative. Social data from Santiment shows a weighted sentiment score of -0.69, while Bitcoin keyword conversations on social media sit below 20% indicating waning interest.
Santiment Marketing Director Brian Quinlivan described this trend in his September 30 summary report:
The world remains in a very fragile place and investors don’t trust anything to rise anytime soon
The cryptocurrency market has suffered along with other risky assets throughout this year due to rising inflation rates, interest rate hikes, a global energy crisis and market exhaustion behind the 2021 bull market.
Declining interest in Bitcoin can also be seen from an on-chain perspective
According to Glassnode data, the number of addresses holding at least 1,000 BTC has remained stable at around 2,117 addresses over the past three days, after a sharp drop of 26.75%. This market behavior shows that leading investors are losing interest in accumulating more BTC.
A similar trend applies to miners. Bitcoin miners’ reserves have been held at this level for about a month, holding steady at 1.86 million BTC, according to CryptoQuant data. The inactivity among miners came after a significant sell-off in August.
Despite the gloomy outlook, the number of new addresses points to a comeback.
The BTC network is expanding and has been showing a surge in individual interest since mid-July. The price gap with network growth points to a potential improvement in momentum in the future. Network growth will signal bullishness if it hits higher levels with a seven-day average of more than 417,000 addresses.
The trading history shows that BTC has formed a critical support level at $19,000. It also reveals that 1.21 million addresses have purchased more than 688,000 BTC. This demand wall must be protected to prevent a steep correction. If it fails to hold this level, it will potentially head towards $16,000 or lower.
If Bitcoin exceeds $20,000
On-chain data reveals a battlefield dominated by bears. Kitco News analyst Jim Wyckoff suggested that the volatility on September 30 could indicate that ‘a larger price action is on the horizon’. Specifically, analysts pointed out that the collapsing volatility is a result of Bitcoin recording sideways movement despite bears having a significant controlling share.
Wyckoff stated that if the price exceeds the September peak of $20,000, the scenario would trigger the bulls. Still, bears will dominate if BTC hits September’s lows next month.
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