As of late, bitcoin has not been the crypto space’s top performing coin. In fact, over the past few weeks, BTC has lost roughly $2,000 from its price, falling from about $12K to the low $10,000 range. According to San Francisco-based digital trading exchange Kraken, things could potentially get a lot worse for the world’s number one digital currency by market cap.
Kraken: Things Will Not Be Good This September
In a recent report, Kraken reminded all traders and investors that September is, historically speaking, one of the worst-performing months for bitcoin. Kraken says that traders should be prepared for another dip that could take BTC roughly seven percent lower than it already is.
In the report, Kraken states:
A number of lesser-known market dynamics suggest incremental volatility is likely on the horizon. With bitcoin underperforming its average monthly returns for most of the year, we could see returns below seven percent. Annualized volatility reverted to the mean after falling as low as 15 percent, while U.S. equities continued to climb. This coincided with a multi-year low for bitcoin’s dominance and a record number of bitcoin units remaining untouched for over a year.
Thus far, in just the past few weeks alone, it is estimated that bitcoin has lost approximately $70 billion from its price. What’s strange is that August of 2020 marked the highest August in over 35 years for assets like stock shares across the globe. Many of these assets ultimately soared to all-time highs, though Kraken is even warning that things could potentially go bad in the stock trading space.
The report explains:
Stocks are relatively expensive and could cheapen in the months ahead. Such a correction could have an impact on the bitcoin price and the broader crypto market.
It is often believed that stocks and bitcoin are correlated, which means that if stocks were to sink in the coming weeks, bitcoin likely wouldn’t be too far behind. In addition, bitcoin’s dominance of the crypto space has been weakened over the past eight months, with several altcoins – such as Chainlink (LINK) – making their way up the financial ladder to potentially challenge bitcoin as the primary cryptocurrency.
However, Kraken offered a ray of hope in the report, stating:
While this trend may continue, we could see an eventual rotation back into bitcoin amid a reclamation of dominance.
A Dip Below $10K Isn’t Out of the Ordinary
Simon Peters of e-Toro fame is convinced that a drop below $10,000 wouldn’t be too off the wall for bitcoin. In an interview, he mentions:
Given that we haven’t yet seen a significant trend reversal pattern on the smaller chart timeframes, a downward spike below $10,000 is not out of the question… If we do see a daily candle close below $10,000, then the pessimism will of course creep pin. However, so long as we remain above that threshold, I remain bullish.