Bitcoin Market Analysis: Weakness in the Short Term, Optimism in the Long Term

In our recent analysis of the cryptocurrency market, we see some clear trends that are interesting for both the short and long term. Although the markets are currently moving sideways, there are signs that this phase might last a while longer. Nevertheless, we remain optimistic about the long term, as certain structural factors indicate that the market is preparing for a new upswing.

**Short-Term Expectations: Weakness and Sideways Movement**

In the short term, we expect the market to show weakness. This is partly due to seasonal factors and partly due to the current phase of the so-called daily cycle. The month of September is traditionally known as a weak month for both the stock and cryptocurrency markets. This is due to various factors, including investors taking profits after the summer and often lower trading volumes during this period.

When we look specifically at Bitcoin, we see a declining trend that has been initiated in recent weeks. The price has dropped from around $65,000 to a low of under $55,000. This represents a significant loss, and we see that trading volume remains at a relatively low level. This low volume suggests that there is not much buying interest and that investors are cautious. This aligns with the overall picture of the market: there are currently no clear signals that the sideways movement will come to an end soon.

**Technical Analysis: The Role of the Daily Cycle**

An important tool we use to understand the market is daily cycle analysis. This is a technique that helps investors gauge when the market may reach a local bottom or peak. Currently, we are in a phase of the daily cycle where the market is expected to decline to a local low, the so-called “daily cycle low” (DCL). This is typically a moment when the market starts to build up again toward a new upward movement.

However, there are various interpretations of where we exactly are in this cycle. Some analysts suggest that we are already close to the DCL, while others indicate that the market still has a month of weakness ahead before we reach a true bottom. This ambiguity makes it difficult to predict exactly when the market will enter an upward trend again. What is clear, however, is that the market can still expect some volatility in the short term.

**Long-Term Expectations: The Bigger Picture**

Although the short term seems challenging, we still see much potential in the cryptocurrency market for the long term. When we analyze the market over a longer period, using weekly and monthly charts, we see that the price has remained relatively stable within a certain range. The price of Bitcoin has fluctuated between $59,000 and $72,000 over the past seven months, indicating a strong foundation on which the market can build.

Interestingly, although we are currently in a correction, long-term indicators such as the 10-month average are still signaling green lights. This means that despite recent declines, we are still in a broader upward trend. The momentum indicators still show positive signals, even though they have weakened somewhat. It would not be surprising if the market rebounds in the coming months, similar to what we have seen in previous corrections.

**Seasonal Influences and Historical Patterns**

Another important aspect of our analysis is the seasonal effect on the cryptocurrency market. Just like in traditional financial markets, such as stocks and commodities, we see clear seasonal patterns in the cryptocurrency market. These are recurring trends driven by factors such as the end of the calendar year, fiscal planning, and investor sentiment.

Historically, the months of August and September have been weak for the cryptocurrency market, while the fourth quarter is often a period of strong growth. In fact, the fourth quarter has been the strongest quarter for Bitcoin in the past twelve years. This pattern is evident in several years when the price began to rise in October, often leading to new all-time highs in December or January.

While this is not a guarantee of future success, there is a clear correlation between the last quarter of the year and positive market sentiment. For example, in 2017, we saw the peak of the bull market in December, while December 2018 marked the bottom of a bear market. Also, in 2020 and 2021, the last months of the year were particularly positive for Bitcoin.

It is important to recognize that history does not always repeat itself exactly. However, the fact that the fourth quarter has consistently produced positive results cannot be overlooked. This keeps investors and analysts optimistic about what the coming months could bring.

**Importance of Fundamental Factors**

In addition to technical analysis and seasonal influences, it is important to consider fundamental factors. The cryptocurrency market has matured in recent years and is increasingly influenced by institutional investors, regulation, and macroeconomic trends.

One key factor that could contribute to future price increases is the growing institutional interest in cryptocurrencies. Although we have not seen a strong increase in demand in recent months, several signals suggest that this could change soon. The approval of Bitcoin ETFs in various markets, along with the increased acceptance of Bitcoin as an investment category by major financial institutions, could lead to a new wave of capital inflow into the market.

Additionally, the monetary policy of central banks worldwide is an important factor to watch. In periods of low interest rates and accommodative monetary policies, as we have seen in recent years, risky assets like Bitcoin typically perform well. If central banks continue their loose policy, this could provide additional support for a new bull run in the cryptocurrency market.

**Conclusion: Patience and Preparation**

In summary, we see that the cryptocurrency market is currently in a period of weakness, partly due to seasonal influences and the natural cycles of the market. In the short term, we expect this sideways movement and potential decline to continue for a while longer. However, when we look further ahead, there are many factors indicating that the long-term outlook remains promising.

Investors would do well to remain patient and prepare for what the last months of the year may bring. It is important to closely monitor both technical indicators and fundamental developments. While the market is currently moving sideways, this could also be an excellent opportunity to strengthen positions for the next upward movement.

As always, it is essential to conduct your own research and consider any risks before making investment decisions.

**Disclaimer:**

The information in this article is intended solely for informational purposes and does not constitute financial advice. The content is based on market observations and analyses at the time of writing, but the cryptocurrency market can fluctuate significantly. Consult a professional financial advisor before making investment decisions. Investing in cryptocurrencies carries risks and can lead to the loss of invested capital.