- Long-term holders now control 75% of Bitcoin’s supply, showing resilience as major selling pressures have eased.
- U.S. and German governments sold a combined $12 billion in Bitcoin, but the market saw minimal price impact due to OTC sales.
- Bitcoin ETFs and potential Federal Reserve rate cuts could drive demand, with possible net inflows reaching up to $1.5 billion in September.
Historically, Bitcoin has faced tough September months, often seeing price declines during this period. However, with recent market shifts and new data, according to data from Spot On Chain, 2024 could mark a change in the trend. August’s performance, while negative, may be a precursor to a more optimistic outlook for September, based on historical patterns.
Around 43% of the years with negative Augusts were followed by positive Septembers. Several factors may influence Bitcoin’s price trajectory this time, including reduced selling pressures, strong long-term holders, and potential catalysts in the broader market.
Reduced Selling Pressure Eases Market Concerns
In the past two months, selling pressures have impacted the market. Notably, the German government sold 49,859 BTC ($3 billion) in July, significantly affecting the market. This move, however, cleared a substantial amount of Bitcoin from one major source. While the U.S. government still holds a substantial amount of 203,650 BTC ($12 billion), recent actions suggest no imminent sell-off.
During 2023 and 2024, the U.S. moved 35,516 BTC ($1.48 billion) to Coinbase, yet the impact was minimal. This was due to over-the-counter sales, which helped avoid sharp price declines. The reduction in these selling forces has eased market concerns, leaving the focus on other factors influencing September’s performance.
Long-Term Holders Signal Market Strength
Long-term Bitcoin holders have maintained a strong position in the market, demonstrating resilience despite recent challenges. In August alone, these holders increased their supply by 262,000 BTC, pushing their total to 14.82 million BTC, which accounts for 75% of the total supply.
Top holders remain relatively inactive, with seven of the top 10 anonymous wallets not moving their BTC for over two years. These wallets collectively hold 237,816 BTC ($14.04 billion), representing 1.2% of the total circulating supply. The long-term stability of these holders provides a foundation of strength for Bitcoin going into September.
Potential Catalysts to Drive Bitcoin’s Demand
Looking ahead, Bitcoin exchange-traded funds (ETFs) could play a crucial role in the market’s future. While August saw a minor dip in net flows, the alternating pattern of positive and negative months suggests the possibility of a rebound in September. Estimates suggest net inflows could range between $500 million and $1.5 billion.
Additionally, potential rate cuts from the Federal Reserve could stimulate demand for Bitcoin, as risky assets often benefit from lower interest rates. Lastly, political developments in the U.S., including bipartisan support for favorable crypto regulations, may boost market confidence further. This support, coupled with FTX’s plan to repay creditors in cash, could reinject major capital into the market.
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.
