- Historical trend: September often sees Bitcoin declining, with a potential dip to $54,000.
- Market caution prevails, with $54,000 as key support and potential for bullish sentiment.
- Traders explore CFCC strategy for 23% annual yield amid declining interest rates and lower spot prices.
Bitcoin’s performance in September could continue its historical trend of decline, following a turbulent August. Over the past seven years, six Septembers have seen negative returns, with an average drop of 4.5%. If this pattern holds, Bitcoin could potentially reach around $55,000, marking a continuation of the bearish sentiment that ended August.
August was challenging for Bitcoin, which ended the month down 8.6%. The market struggled after the initial “BOJ crash,” failing to recover above $65,000. Ethereum fared even worse, with a significant drop of 22.2%, largely attributed to alleged selling by Jump Trading.
As we move into September, the market appears cautious, with historical data suggesting a likely decline. However, support is expected around the $54,000 level, a price point that proved resilient in July before Bitcoin surged to $70,000.
Looking ahead, September’s outlook remains uncertain. With historical data indicating a potential drop, Bitcoin’s price could test the $54,000 support level once again. Key economic data releases, such as Unemployment Claims on Thursday and the Non-Farm Payroll (NFP) report on Friday, are not expected to have a significant impact on the crypto market.
The volatility curve is anticipated to steepen further as frontend vols continue to drift lower in a sideways market. Despite the overall market lull, there is still evidence of medium-term bullish sentiment. More long calls are being rolled out until March for both Bitcoin and Ethereum. Notably, another 200x BTC-28MAR25-120k-C was bought, increasing its open interest to 2.1k contracts.
Given the current market conditions, traders can consider a Conditional Fixed Coupon Convertible (CFCC) strategy. With interest rates on the decline due to expected rate cuts, and basis yields at the lower end of the range, a CFCC offers a strong yield opportunity. Traders can earn up to 23% per annum by taking advantage of the lower spot price.
The strategy involves earning 23% per annum weekly as long as Bitcoin’s spot price remains above $53,000, with a strike price of $50,000 and protection at $40,000. If the spot price falls below $40,000 at expiry, the deployed USD is converted to Bitcoin at the $50,000 strike price.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
