Bitcoin (BTC) and the broader crypto markets are experiencing challenging conditions, worsened by September’s seasonality struggles. Kaiko researchers explored how a potential US rate cut could affect Bitcoin, presenting four revealing charts.
Historically, September has been a tough month for Bitcoin, with declines in seven of the last twelve years. This trend continues in 2024, with Bitcoin down 7.5% in August and 6.3% in September, trading over 20% below its recent all-time high.
According to Kaiko Research, a US rate cut could boost risk assets like Bitcoin. Federal Reserve Chairman Jerome Powell hinted at possible policy adjustments, leading to expectations of future rate cuts, which might improve market liquidity and benefit crypto assets.
September’s volatility is high, with Bitcoin’s 30-day historical volatility surging to 70%. Ethereum has also experienced heightened volatility due to specific events like Jump Trading liquidations and Ethereum ETFs launches.
Bitcoin’s implied volatility (IV) has risen since the start of September. Short-term options expiries have seen the sharpest increase, with the September 13 expiry jumping from 52% to 61%, indicating heightened market stress.
The Bitcoin trade volumes chart shows increased trader participation, with cumulative trade volume nearing a record $3 trillion. Bitcoin investors view rate cuts as positive catalysts, but concerns remain about how the market might interpret a larger-than-expected cut.
Alongside rate cut speculations, other factors like the upcoming US elections, including debates between Donald Trump and Kamala Harris, contribute to crypto market fluctuations.
