September Dips Historically Have Paved Way for Big Runs
Bitcoin was designed for a Financial Crisis. So far, it’s working well.
The market has taken quite the beating today, and we are all used to it, no need to panic. Fears over economic calamity in China have taken the stock market and the crypto market down. Over $250 billion in value was wiped off the crypto market today. Bitcoin dipped 9% as of press time and Eth dipped over 10%. Experts have pointed out that it is clearly tied to the rumored collapse of Chinese real estate giant Evergrande, which has over $300 billion in liabilities which they may default on, according to reports.
Moreover, Binance is in the hot seat as it has been reported that an investigation by U.S. regulators of insider trading and market manipulation is on the table. More alarm has come throughout the day, as another Chinese developer Sinic has all but collapsed today. Shares were down over 87% before trading was halted. However, investors must realize that Bitcoin was created as a hedge against such events, and within the debt-based fiat system we deal with, such events are inevitable.
Another Chinese property developer collapsed this afternoon in Hong Kong (dropping a massive 87%) before it was halted. Shanghai based developer Sinic…racing #Evergrande to the bottom. Get ready for a banking crisis in #HK AND #China pic.twitter.com/nn7LoZkHaw
— ????Kyle Bass???? (@Jkylebass) September 20, 2021
So then why is Bitcoin dipping so hard? Well, of course, global events will hurt Bitcoin, too. However, if you look at historical data, and have a longer time horizon, Bitcoin is the safe-haven asset in light of these calamitous events. September dips especially have historical data showing they are usually followed by a big run-up.
First of all, there is massive support at $40-42k, which could stabilize the pull-back. Considering the horrible news that came in like a flood today, holding above 42k would be a great sign. The underlying trend remains bullish while Bitcoin holds above $40k. Also, as previously mentioned, more people are likely to move money into Bitcoin during these types of events.
Suggested Read: CRYPTO MARKET SHOWING SIGNS OF REBOUND DESPITE EVERGRANDE FEARS
Past data shows that September dips are normal, and while this one was caused by external factors, it is still in line with the data. After these September dips, we have historically (2013, 2017) seen Bitcoin go on a bull run. Bitcoin dipped 1.37% in September 2013, only to rally from $100 to $1,100 in the following two months. A similar rally took place after the September 2017 dip of 8%. There has usually been a sharp rally in these halving cycles in Oct-Nov and even with all this surrounding FUD, a similar situation appears plausible.
Bitcoin has logged negative returns in September for the last 6 out of 8 years. Shivam Tharkral, CEO of BuyUCoin has stated that we still may see Bitcoin break this trend this month, with only a few days left because “the main reason for this is that the number of investors coming into the market is at an all-time high”. “Bitcoin has a strong support at $42,000 and an upper side barrier at $50,000. However, it has to stay above the $51,000 level for 48 hours to change the trajectory.” Tharkal mentioned that he still believes Bitcoin will rise to between $75,000-$80,000 by January, and he posits this based off the money supply globally “being too high”.
Because of the Fed maintaining its nearly zero percent interest rates and quantitative easing to support the economy during the pandemic, and of course the credit crisis with Evergrande rippling through the world markets, it is very possible that this will only help bolster the case for Bitcoin and crypto-assets. It is important to remember, “fiat gonna do what fiat does”, and we are seeing the rotten fruits born of its mechanisms. We need to stay the course, these events will likely only increase over time, and this is, of course, was why Bitcoin was created in the first place. Never forget the hidden message in the Bitcoin genesis block.
The post September Dips Historically Have Paved Way for Big Runs appeared first on CryptosRus.
Text source: CryptosRus
