Bitcoin breaks May high… After weakness in August and September, is it entering a new upward trend?

▲ Bitcoin (BTC) ©Dasol Ko

Bitcoin (BTC) soared to a 7-month high, breaking through the long-standing $80,000 mark and its May high in succession. As risk appetite revived in financial markets, which had been suppressed by bond yields and tightening concerns, recent capital inflows into the cryptocurrency market and falling oil prices contributed to the upward trend.

According to investment media FXStreet on September 21 (local time), Bitcoin broke its May high early in the day, rising above $80,000. As concerns about rising treasury yields, debt burdens, and the possibility of the US central bank resuming tightening eased, risk asset preference recovered across financial markets, and cryptocurrencies also rose together. Recent capital inflows also supported the rally, and falling oil prices had a positive impact on investor sentiment, IG analyzed.

However, regulatory uncertainty still remains. IG assessed that the cryptocurrency industry has been placed in a more uncertain regulatory environment as the legislative push for the US cryptocurrency market structure bill, the Clarity Act, failed. In particular, it raised the possibility of a clash between the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) over regulatory leadership, pointing out that market participants could bear uncertainty between the two agencies.

A cautious assessment was also made regarding future legislative prospects. IG explained that although the cryptocurrency industry has been pushing for clear legal rules, it must now hope that Congress will find a solution again after the midterm elections. However, it viewed the possibility of legislative progress as low, citing the potential for intensified political confrontation in the US over the next two years.

Nevertheless, market attention is shifting back to price increases. With Bitcoin and major cryptocurrencies rebounding, there is an analysis that the investment fervor that had weakened after the August rise could revive. In particular, BTC breaking its May high was evaluated as an opportunity to attract new capital and market attention again.

Seasonal trends also drew attention. According to IG, Bitcoin has recorded negative returns on average in August and September since its inception, but then enters a 10-month period where the average return is positive. IG analyzed that breaking through $80,000 and the May high could be a signal to boost the mood of the cryptocurrency market again.

*Disclaimer: This article is for investment reference only and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*