Bitcoin: Will September Just Be a Fake-Breakdown Month?
Looking forward to a bullish Q4, as per historical tendencies
Welcome to the Rekt Capital newsletter, a resource for investors who want to better navigate the crypto markets with the help of cutting-edge crypto research and unbiased market analysis.
The Weekly Channel
Last week, Bitcoin confirmed a breakdown from its black Downtrending Channel.
The good news however is the price was able to Weekly Close above the bottom of the orange area, which has been a valuable price reversal zone for BTC over the past several months.
This orange area has figured as a bargain-buying liquidity area from which price would rebound, whether via downside wicks or entire candle-bodies.
Since July, Bitcoin has broken down from this black Downtrending Channel three times and on each of the previous breakdowns price has been able to reclaim the channel within a matter of weeks.
Could the same occur also this time?
For Bitcoin to entertain such a scenario, price would need to reclaim the $55850 lows (blue) which price Weekly Closed below most recently; these lows represent the bottom of the early July correction:
Reclaiming the blue level as support would enable a move back into the Channel Bottom which would be the crucial area to reclaim as support.
Here is that scenario visualised:
If September has become a breakdown month then October should become a moon where price manages to reclaim the Downtrending Channel as support:
After all, in Halving years Bitcoin has enjoyed three consecutive months of upside price action in October, November and December.
September tends to generally be a month of consolidation, often achieving downside of less than -10%, with the exception of -19% in a Bear Market (2014) and -13% in a Pre-Halving year (2019).
When it comes to September, single-digit upside or downside is the more likely outcome, which only highlights this inherent consolidation quality that we tend to see from Septembers.
So single-digit downside is not out of the ordinary in Septembers but neither are three consecutive months of uptrending price action in the Octobers, Novembers, and Decembers that follow afterwards.