A September Surprise?
What is happening with BTC in the month of September has blown my mind. Historically, this month is a pretty bleak month for the world's most popular cryptocurrency.
From what experience has taught us, Bitcoin has frequently slumped during this time, averaging 4% since its inception.
Yet, this year seems a bit different.
I've been keeping a close eye on Bitfinex, the exchange famous for its whale activity. What I'm seeing there is quite intriguing. Traders are borrowing money to place bullish bets on Bitcoin, flying in the face of conventional wisdom about September's bearish tendencies.
This isn't just a small trend – we're talking about a significant increase of 3,000 BTC in margin longs since late August.
What's even more indicative, however, is the interest rate on these lent funds. In a very short time, it has jumped to over 20%. And while one would logically think this would curtail traders from doing this, just the opposite seems to be occurring. To me, this indicates quite a firm belief that Bitcoin is about to make a strong upward move.
This bullish bias is not displayed by Bitfinex alone.
Looking at the big picture, Bitcoin futures everywhere display positive funding rates, meaning traders pay a premium to keep their positions long, which is pretty much a sure sign of optimism in the market.
The options market has a similar story.
Over-the-counter desks are showing increased demand for higher strike-price call options. Translation into plain English means big players are betting on Bitcoin's upward price, and not just by a little, probably by much.
But let me say this:
I'm always very careful when making any guesses within the highly volatile realm of crypto. These signs, however, are amazingly hard to ignore, and it does seem that most traders don't expect Bitcoin to live up to its reputation this year, considering how bearish September usually is.
Of course, one should always bear in mind that the crypto market can change in an instant. Yes, these are good indications, but not assurances. Exogenous events, whether some sort of regulatory news or even changes in macroeconomic conditions, can always occur and get in the way.
This could be a challenge to our assumptions.
Sometimes, we depend on historical patterns with which to take a cue from our expectations, while markets can be quite surprising. This could be a possibility where September's trend could be bucked, and that reminds me why cryptocurrency fascinates me: the ability for the currencies to defy expectations and forge new paths.
I'll be keeping a close eye on how all of that plays out as we forge deeper into September.
Will Bitcoin finally break its curse this September?
Or will the historical pattern assert itself once more?
Posted Using InLeo Alpha