Can the market initiate a trend reversal?

However, there is a silver lining for Bitcoin, as a major ‘crash’ is probably no longer to be expected. Instead, BTC/USD is copying the behaviour from 2019 compared to the S&P 500, suggesting that it is only at the beginning of a long-term bull market.
‘We can also see that there has been a significant correction in the markets that is likely coming to an end, just as the correction in 2019 ended at $6,000, we are likely to end up at $45-50,000 for Bitcoin,’ Van de Poppe concluded.
‘From this perspective, with the upcoming rate cuts by the FED, the weakening economy and global liquidity being increased in China, it seems almost inevitable that we are indeed on the verge of the biggest bull cycle ever.’
On 18 September, the US Federal Reserve will decide whether to cut interest rates. The markets have been expecting such a cut for a long time.
This should ultimately benefit cryptocurrencies and risk assets, as lower interest rates boost liquidity on the markets.

Following their victory in US federal court, lawyers for crypto exchange Coinbase may soon have access to documents from the US Securities and Exchange Commission (SEC) relating to the regulator’s categorisation of crypto tokens as securities.
In a document filed with the US District Court for the Southern District of New York on 5 September, Judge Katherin Failla granted in part and denied in part Coinbase’s corresponding request for the SEC to release documents. The exchange had been arguing with the agency since July over the scope of its request to compel the SEC to turn over documents related to the regulator’s approach to categorising digital assets.
According to Paul Grewal, Coinbase’s general counsel, the 5 September order would result in the SEC producing ‘important discovery’ for the ongoing civil case. Coinbase filed a discovery request with the SEC on 23 July, alleging that the agency failed to produce documents about ‘tokens and services and the application of securities laws to digital assets,’ the company’s IPO, and Chairman Gary Gensler’s testimony about digital assets.

Cryptocurrencies continue to correct and have lost significant ground in the last week. Bitcoin (BTC) has lost around 5% of its value in seven days, while Toncoin (TON) has even lost over 10%.
In a historically weak month of September, the correction on the digital currency market thus continues. Nevertheless, analysts point to the historic extent of the corrections. The September low could already have been reached. ‘The decline is nothing unusual’.
The correction of Bitcoin in September with a current decline of -6.19% is in line with typical historical trends. In recent years, particularly in 2022, 2021, 2020, 2018 and 2017, Bitcoin experienced similar single-digit losses in September. Such declines are therefore nothing unusual and follow seasonal market movements. Despite historical weakness, a potential trend reversal could be initiated, influenced by key macro indicators and monetary policy decisions by the Federal Reserve. For example, a major interest rate hike could trigger a bullish trend in October and November, which are already historically strong months for Bitcoin.
Analysts expect that the macroeconomic weakness and growing recession worries in the US could strengthen Bitcoin. Weak labour market data and low bond yields point to interest rate cuts by the Federal Reserve. Such monetary easing traditionally weakens the US dollar, making alternative assets such as Bitcoin more attractive. Bitcoin could therefore benefit from a safe-haven narrative.