Bitcoin Surges 25% in August…Will it Aim for $85,000 in September?

▲ Bitcoin (BTC) ©Dasol Go

Bitcoin (BTC) surged by approximately 25% in August, marking its strongest monthly gain in 21 months, and then surpassed $78,900 in the first trading session of September. While ETF inflows and large-scale purchases by Strategy supported the rally, monetary policy and geopolitical risks are limiting optimism.

According to investment media FXStreet on September 1 (local time), Bitcoin rose by about 25% during August, recording its highest monthly return since November 2024. Despite closing positively for two consecutive months, the historical average return for September is a negative 2.86%, suggesting a cautious approach is needed seasonally.

Simon Peter Masabni, Head of Business Development at XS.com, assessed that despite recent adjustments, the market trend in August was clearly positive, and the market structure compared to the beginning of the month had become more robust. However, in September, the US Federal Reserve's (Fed) monetary policy, employment and inflation indicators, and escalating conflict between the US and Iran are cited as major risks. He explained that further adjustments could occur if financial conditions become tighter again, but there is also a possibility that the recent recovery could solidify if liquidity and institutional demand are maintained.

Institutional demand continued at the beginning of the week. According to SoSoValue, US Bitcoin spot ETFs saw net inflows of $216.7 million on the 31st of last month, with total net inflows for the previous week reaching $924.48 million. Michael Saylor announced that Strategy broke its weeks-long buying hiatus by investing $370 million to purchase an additional 4,603 Bitcoins. This increased the company's total holdings to 845,050 coins. Strategy also expanded its cash holdings by $29 million and repurchased $152 million worth of STRC, adjusting its total reserves to $6.71 billion based on dollar assets and its net leverage to 0.0%.

The macroeconomic environment is a burden. Fed Chairman Kevin Warsh sent hawkish signals in his inaugural speech at the Jackson Hole Symposium last week, indicating that interest rates could be raised if inflation does not slow sufficiently. Rising energy prices due to escalating tensions between the US and Iran have also rekindled fears of prolonged inflation. According to CME FedWatch, the market is pricing in about a 67% chance that the Fed will raise interest rates at the policy meeting on September 15-16.

Bitcoin traded around $78,900, significantly above its 200-day Exponential Moving Average (EMA) of $72,364. The 50-day EMA at $70,069 and the 100-day EMA at $69,097 are also forming lower support levels. The daily Relative Strength Index (RSI) recorded 71, close to the overbought zone, and the Moving Average Convergence Divergence (MACD) maintained a positive trend, but upward momentum slowed. If $72,364 is held, $85,000 is suggested as the next target, but if the support level breaks, there is a possibility of adjustment down to $66,500 and $62,300.

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