TL;DR
- BTC ended August down 8.6%, failing to reclaim the $65k level.
- ETH performed even worse, dropping 22.2% due to selling allegedly done by Jump Trading.
- For September, a historically bearish performance is expected with a possible drop to ~$55k; however, strong support is anticipated around $54k.
The month of August ended with significant losses for cryptocurrencies, highlighting an 8.6% drop in the price of Bitcoin (BTC).
The month started with an event known as the “BOJ collapse“, which negatively affected the market.
Despite several recovery attempts, BTC failed to break above the $65k level, leaving the asset in a weak position to close the month.
This drop comes as Ethereum (ETH) suffered an even more dramatic decline, dropping 22.2% in August.
This drop is attributed to the alleged sell-off by Jump Trading, which exacerbated the bearish pressure in the market.
Looking ahead to September, expectations are not encouraging.
Historically, September has shown a bearish performance pattern, with six of the last seven years posting negative returns and an average return of -4.5%.
If this historical trend continues, BTC could experience a further drop, settling around $55k.
However, BTC is expected to find a strong support level around $54k, a critical level that already proved its importance in July by serving as a bounce before BTC hit $70k.
In terms of economic data to be released this week, the highlights include the Jobless Claims scheduled for Thursday, September 5 and the Nonfarm Payrolls (NFP) Report scheduled for Friday, September 6.
However, these reports are not expected to trigger significant movements in cryptocurrency prices, given that macroeconomic data has had a diminishing impact on the crypto market in recent weeks.
Market Outlook and Investment Opportunities in Bitcoin
Despite the recent calm in the market, there are signs of a strong bullish bias in the medium term.
The volatility curve is expected to steepen further, with short-term volatilities declining in a sideways market.
In addition, there is an increase in the purchase of long-term call options for BTC and ETH, which reinforces the perception of a possible recovery in the medium term.
For example, the recent purchase of BTC-28MAR25-120k-C options, which has pushed its open interest to 2.1k, suggests that investors still hold an optimistic view on the future of BTC.
For those interested in generating returns in this declining interest rate environment, an interesting opportunity presents itself with Conditional Fixed Coupon Convertibles (CFCC).
These instruments allow for an annual return of up to 23%, provided the spot price remains above $53k.
The BTC CFCC option expiring on November 8 offers additional protection with a strike price of $50k and a protection level of $40k.
Only if the spot price drops below $40k, the deployed USD will be converted into BTC at $50k.
This strategy provides solid returns in a lower price environment, taking advantage of the possibility of interest rate cuts and stable returns in a volatile cryptocurrency market.
