September isn't Great for Markets. Is this the same for Crypto?
The Crypto space exhaled this week, seeing many coins reverse lower or bump into noticeable resistance above current levels. This furthers the conversation around the need for continued caution for current/prospective positions as the path of least resistance looks to be lower for now. From a focused perspective, the chart of $ETH seems particularly discouraging, now sitting within one box of reversing down on its default chart. The move would see the coin fail to move past a significant level of support around $2,850, a net negative if a reversal is in store.
Broader report pieces have touched on the weakness in equity markets seen during September. Today’s crypto piece will attempt to do the same by analyzing historical returns for Bitcoin ($BTC) during the month. We also laid out return profiles for other months, but want to focus specifically on the poor performance during a typically poor September. On average, September is the only month of the year to post a negative return since 2011, falling roughly 5%. It also holds the lowest “maximum” return of any month, suggesting upside action could be somewhat limited if the coin can best its historical averages. Averages can be artificially inflated or deflated by abnormally large or small values. This doesn’t seem to be the case however, as September has only posted a positive return for $BTC less than a third of the time. Said otherwise, price action leaves the technical picture on thin ice… and seasonal headwinds lay ahead. While history has shown cryptocurrencies have been able to avoid “normality” from time to time, avoid putting large amounts of money to work for now.
