Aug 30, 2022 at 06:44A confluence of several negative factors at once may lead to the situation when the price of Bitcoin in September will again fall to new annual lows. Here are three charts that illustrate why this could happen.
Statistics say prepare for the worst
September tends to be the worst month for Bitcoin — at least, that was the case from 2013 to 2021 without a single exception. The average BTC price drop in September is 6%, matching the stock market’s seasonal decline. The S&P500 average decline in September is ~0.7% (if you take the stats for the last 25 years).
September will come in a couple of days, but we can already see how the cryptocurrency market is gradually falling.
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Network activity has fallen to a minimal level
Meanwhile, according to The Block, financial activity in the Bitcoin network also updated the minimum for 2022 — the day before the equivalent of only $8.2 billion was transferred during the day (back in May, the figure reached $27 billion).
Such a noticeable decrease in the number of transactions is an alarming signal for cryptocurrency.
The difficulty of the network will reach a maximum
The increase in hash rate and mining difficulty has matched the fall in Bitcoin’s price. At first glance, this divergence plays a positive role, proving miners’ ability to provide a high level of network security even during a crisis.
On the other hand, a jump in difficulty when the value of BTC is low will lead to a mass shutdown of outdated equipment, as well as a new wave of bankruptcies of miners. In general, the combination of increased mining difficulty and a likely drop in price — usually leads to new sell-offs, as miners are forced to liquidate their Bitcoin holdings to stay afloat.
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