Bitcoin Faces a Tough September, as Other Important Data Also Reflects This Beyond Price

Bitcoin ended September with a double-digit loss compared to August. As market sentiment continues to deteriorate, the largest cryptocurrency must hold at a vital support level to avoid a significant correction.

Bitcoin is consolidating around the support level of $19,000. Market participants have witnessed weak price action in recent weeks.

Market sentiment towards Bitcoin remains negative. Social data from Santiment shows a weighted sentiment score of -0.69, while interest in Bitcoin on social media is below 20%, indicating that interest has waned.

Brian Quinlivan, the marketing director at Santiment, highlighted the trend in the recap report dated September 30, stating that ‘the world remains in a very fragile situation, and traders do not believe much will change soon.’ Crypto has suffered this year alongside other risk assets due to rising inflation rates, increasing interest rates, the global energy crisis, and market exhaustion from the 2021 bull market.

The declining interest in Bitcoin can also be seen from an on-chain perspective. According to Glassnode data, the number of addresses holding at least 1,000 Bitcoins has remained stable at around 2,117 addresses over the last three days, following a sharp decline of 26.75%. Such market behavior suggests that prominent investors have lost interest in accumulating larger quantities.

A similar trend is occurring with miners. According to CryptoQuanta data, Bitcoin miners’ reserves have surged to 1.86 million Bitcoins, holding around this level for nearly a month. Inactivity among miners followed a significant drop in August.

Brutal Bear Market

Despite data showing a ‘bleak’ outlook for Bitcoin, the number of new daily addresses created on the network hints that the largest cryptocurrency could be turning a corner. The Bitcoin blockchain is expanding, showing an increase in retail investor interest since mid-July. A bullish divergence between network growth and asset price indicates a potential increase in momentum in the future.

If network growth reaches a higher level on a seven-day average above 417,000 addresses, the bullish narrative could be confirmed.

Transaction history shows that Bitcoin has established a critical support level at $19,000, where 1.21 million addresses purchased over 688,000 Bitcoins. This demand wall must hold to prevent a steep correction. If it fails to maintain  this level, a sell-off could follow, potentially sending Bitcoin down to $16,000 or lower.

IntoTheBlock’s IOMAP model shows that Bitcoin faces multiple resistance areas ahead. The most significant is at $20,000 where 895 thousand addresses bought nearly 470,000 Bitcoins.

This has been a tough year for markets, and crypto has not been spared the consequences. Although Bitcoin has been in a brutal bear market for nearly a year now, several signs suggest that the pain may not be over. Even as new participants join the largest blockchain, the global macro picture, increasingly negative sentiment, miner interest, and recent price action indicate that there is no clear reason for the narrative to turn bullish anytime soon.