Cryptocurrency Market Sees Downturn Ahead of Holiday Season
The cryptocurrency market experienced a decline on the last trading day of September, following a surge in the previous week. Bitcoin, the flagship cryptocurrency, fell 3.5% to $63,612.63, after briefly reaching the $65,000 mark earlier in the week. Crypto stocks, such as Coinbase and MicroStrategy, also saw a decline, with Coinbase falling 3% in premarket trading and MicroStrategy sliding 5%.
The market downturn comes as investors prepare for potential strikes at ports along the East Coast and Gulf Coast, which could impact the economy ahead of the holiday season. Analysts have also warned of overbought conditions, citing the rapid 5% increase in bitcoin’s value over the past five days.
Despite the decline, bitcoin is still on track to post its strongest September performance ever, with an 8% gain for the month. This marks the second consecutive positive September for the cryptocurrency, which has historically been its weakest month.
Coinbase is poised to finish the month with a 4% gain, although it has fallen nearly 14% for the quarter. MicroStrategy, on the other hand, has seen a 33% increase for the month and a 28% gain for the quarter.
As the market heads into a seasonally strong quarter for crypto and risk assets, some analysts believe bitcoin’s correlation with the S&P 500 will continue to benefit from rate cuts, clarity following the U.S. presidential election, and favorable market conditions. This could lead to increased flows into crypto ETFs and a continued surge in bitcoin’s value.
In related news, the combined net buying volume of U.S. bitcoin ETFs last week exceeded a typical one-month supply of newly mined bitcoin, according to Bitwise-owned ETC Group. This was largely driven by the policy reversal by the People’s Bank of China.
Leave a Reply