Is History Repeating Itself ? September Crypto Analysis

Historically, September has been a bearish month; in fact, the past six Septembers in a row have been bearish, and the question is: will this September be the same?

Regardless of the direction of the overall trend, I can’t help but notice that all of these Septembers act as the setup before the bigger move, and I think that is more important in September of 2017. Yeah, from the beginning to the end, Bitcoin went down 7%. There is so much more that happens in the middle than taking start to finish at face value. For example, in the first half of the month, Bitcoin actually fell 42% below $3000, and then once it hit that bottom, that was the start of the reversal for a much bigger move. 94 days later, it pumped 587% to $9600.

A Closer Look At 2018 And 2019 Bitcoin Prices – September Crypto Analysis

2018 was a similar story, but it was going in the other direction. Yeah, from start to finish, Bitcoin only fell 5%, but from the start of October to mid-December, it fell over 50%.

In 2019, the bulls got trapped because Bitcoin pumped 12% in the first three days of the month, and then it fell almost 30% over the next 26 days. That was one of the biggest drops of that year, but at the end of the day, from start to finish, it was only recorded as a 13% loss. Do you see what I’m getting at here? Yes, it has been a bearish month historically, but taking the face value of the drop could be deceitful based on the bigger move.

Bitcoin Monthly Returns
Bitcoin Monthly Returns

A Look At 2020 And 2021 Bitcoin Prices

Look at 2020; overall, it was a very bullish year, with a 300% move to the upside from start to finish, but September was still a bad month. In the first four days, we crashed 16%, and the rest of the month was spent recovering from that crash. The net loss was 7.5%, but look at the bigger move. From the start of October, bitcoin spent the next almost 200 days pumping 500%. 2021 sort of follows the same idea; we all know that 2021 was the year bitcoin put in its all-time high, and although September from start to finish was a 7% crash, the fall that month was the higher low that led to the all-time highs. Always take the bigger picture into account; 2022 is no different.

Look at the overall bearish trend from the terrible time we had last year. I remember the buildup to the September bearish sentiment, and the market did its best to trap the traders. In the first six days of the month, bitcoin stutter stepped down 7% below $20,000, and right when everyone went short thinking it was going to crash down further, it rebounded 23% from top to bottom in the next six days, trapping the bears. When the bears got trapped, it rebounded past $20,000 and passed the 50-day EMA, so now the Bulls thought that it was going to retest $25,000, and everyone went long naturally again.

September Crypto Analysis

The Bulls were the ones who got trapped, and from top to bottom, Bitcoin fell 20% back under $20,000 in the next six days. In September last year, Bitcoin battled in a big range, fighting over the $20,000 level, but if you’re only looking at the month as a whole from start to finish, it only lost 3.1%. My point here is that there is always more to the story than just A to B returns for whatever month, and sure, September is bearish, but it always leads to the bigger move.

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Even last year, after the fight for $20,000 in September, bitcoin put in its local low in the $15,000 two months later, so of course you’re thinking about what’s going to happen now. Look at this chart below. Do you see that yellow line across the middle there? That’s around the $25,200 level, and this is the support resistance level that is the deal breaker.

The Bigger Picture in 2023

In my eyes, the bigger picture for 2023 has been bullish overall, but things have been a little scary since the high in July. As of right now, Bitcoin is above that $25,000, but if it loses that same level and puts in a lower low, that would structurally break its pattern in a big way, and that could be the precursor for future bearish action. On the flip side, that same support resistance line we’re headed to could act as a big spring that projects us back up to $30,000 and puts in another higher high. What scares me is that when we pumped up at the end of August and immediately got shut down, that rejection counts as a higher low. We got rejected from the 200-day moving average; we got rejected from the 50 line on the RSI.

We’re looking bearish on the momentum oscillators, and the current price action is dead smack in the middle of a low volume node. There’s not another big spike in volume until we get around the $23,000 level, and if we did fall to that level, that would be a break of structure, and I would expect more downside from there.

Conclusion

I’m not going to tell you it could go up or down. I’m going to tell you that that support resistance line is the deal breaker, and as much as I hate to say it, my guess is that we are going to lose that line and continue down before we turn around for the prehabbing pump. To be fair, I think that the bottom is already in, and whenever we turn around from the dump that’s about to happen, that is going to be the higher high that takes us up to the next bull run.

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