Bitcoin is heading towards the end of a sluggish month as it tries to recover from a prolonged dip.
After up 12% in June, BTC is poised to end July 2023 with a drop of around 3.5%.
This was the fifth week in a row, and its worst week since June 9th.
The third quarter, ending September 30, is also historically the weakest for Bitcoin. According to CoinGecko, average third-quarter earnings up to 2014 were just 4.67%, and only four of the nine quarters since bitcoin's inception had a positive third-quarter.
“August is a quiet month for traditional market investors and crypto is no different,” said Greg Cipolaro, global research manager at Stone Ridge Asset Management's cryptocurrency NYDIG.
“Historically, average returns decrease as we enter the summer months, and this may continue into August.”
But despite the latest situation, Bitcoin is still up about 77% compared to the beginning of this year and investors are still optimistic.
Various factors may be promising for BTC, such as:
- The XRP decision that could set a precedent for how cryptocurrencies are regulated in the US.
- Legislation moving forward in Congress that could provide greater clarity and support for the crypto industry.
- BTC ETF applications that can increase demand and liquidity for BTC.
- The BTC halving that will occur in the spring of 2024, which could reduce the supply of Bitcoin and increase the rarity of the coin.
According to Ric Edelman, founder of the Digital Assets Council of Financial Professionals, all this indicates that the price of Bitcoin will be “much higher than it is today” in six months.
But according to Edelman, “We're likely to see more recessions over the next few weeks because there's no chance of any news.”
Edelman continued his thoughts as follows:
“It is unlikely that Gensler, chairman of the U.S. Securities and Exchange Commission, will change his stance on crypto, the SEC is unlikely to adjudicate on Bitcoin ETF applications, it is unlikely that Congress will issue any major legislation. All the signs for these possibilities remain strong though, so everyone is in a waiting period and that will likely continue for the rest of the summer.”
Edelman expressed his thoughts on the FED's statement on Wednesday that it would not hesitate to continue to increase interest rates if necessary:
“As uncertainty remains about whether there will be a recession or a correction in the stock market, investors are looking for ways to protect their diversified portfolios.
Investors are unlikely to find a bargain price, so there are more arguments for substantial gains to come than substantial dips.
There is not much reason to worry that the Bitcoin price could drop by 20% or more.”
*Not investment advice.
