Bitcoin Faces First Quarterly Decline in 2023: A Shift in Crypto Trends

As September wraps up, Bitcoin faces its inaugural quarterly decline of the year, marking a departure from its previous bullish trend. The leading cryptocurrency, valued around $26,970 in New York on Saturday, has seen an 11% dip since June. This comes after an impressive 83% surge in the initial half of the year, bouncing back from a significant 64% dip experienced in 2022 due to industry turbulence.

Bitcoin has remained within a narrow trading range since the latter part of the second quarter, primarily due to uncertainties in the macroeconomic landscape. The Federal Reserve recently opted to keep interest rates steady but hinted at a prolonged period of elevated rates. This development tends to reduce the appeal of riskier investments.

Hosam Mahmoud, a research analyst at CCData, noted, “The Federal Reserve’s hawkish stance has heightened investor apprehension, leading to declines in both traditional and digital asset markets.”

A report by CoinShares revealed that over a nine-week span concluding in mid-September, investors withdrew nearly half a billion dollars from cryptocurrency products, with Bitcoin accounting for 85% of the outflows, totaling $45 million.

Recently, the US Securities and Exchange Commission postponed decisions on BlackRock Inc.’s spot Bitcoin ETF proposals, a move that followed a similar delay for Ark 21Shares and GlobalX until January.

Peter Tchir, head of macro strategy at Brean Capital, commented, “Current investors got very excited about the possibility of a Bitcoin ETF spurring a new wave of demand. A few years ago, it would have helped a lot, as it was difficult to own crypto, but now it just isn’t that hard. It still hasn’t materialized and maybe there is some doubt that it ever will, at least in the near term.”

Nonetheless, the growing likelihood of a US federal government shutdown has some Bitcoin advocates anticipating a rally akin to the one triggered by the regional bank crisis earlier this year. In March, Bitcoin surged approximately 25% over a one-month span following the failure of three small- to mid-size US banks in just five days.

Will Tamplin, senior analyst at Fairlead Strategies, remarked, “There are signs Bitcoin’s corrective phase is maturing. It has cleared the 50-day moving average and reflected improved momentum off the back of oversold conditions.”

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