Bitcoin (BTC) dropped to around $57,500 on Monday, extending its seven-day decline to over 10%, as the broader cryptocurrency market experienced a downturn. The fall comes during the Labor Day holiday in the US, a time when trading activity is typically subdued.
The leading cryptocurrency shed nearly 1.2% in the past 24 hours, with other major digital assets also seeing losses. Solana (SOL), BNB Chain’s BNB, XRP, and Cardano’s ADA all fell by as much as 3%, while Dogecoin (DOGE) led the declines with a 5% drop. The broader CoinDesk 20 Index, which tracks the largest cryptocurrencies by market capitalization, decreased by 1.88%.
This most recent decrease is consistent with a historically negative trend that was noted in September. According to market data, Bitcoin has historically underperformed this month, losing about 6% on average. Nevertheless, some traders think that the US Federal Reserve may lower interest rates, which would help Bitcoin and possibly reverse the downward trend.
The creator of the cryptocurrency exchange Paybis, Innokenty Isers, offered his commentary on the matter, pointing out that September is known to be a difficult month for Bitcoin. Nevertheless, he made the argument that by boosting economic liquidity, a reduction in interest rates might improve Bitcoin’s standing as a store of value.
The drop in Bitcoin also had an impact on exchange-traded funds (ETFs) tracking the cryptocurrency that are listed in the US. On Friday, these funds announced $175 million in net outflows, their fourth day of losses in a row. Despite $173 million in trading volume, there were no net inflows or outflows from ETFs tracking Ether (ETH).
As September goes on, Bitcoin will have to overcome its historically poor performance in this month. Key levels like $58,450, which are regarded as critical for Bitcoin’s short-term outlook, are being closely monitored by analysts. If support isn’t maintained above this level, there may be more declines; on the other hand, a bounce might start a recovery, which might be fueled by a short squeeze if bearish traders are forced to cover their positions.
Even with the present market slump, some traders maintain a cautious optimism. Investors such as trader CrypNuevo are watching for chances to go long in the event that Bitcoin drops to about $56,600, with an upside target of about $61,300. As usual, there could be large price swings in the upcoming days due to the ongoing extreme volatility of the cryptocurrency market.
Yahoo Finance and CoinDesk contributed to this report.
