Bitcoin and Ethereum have shown notable resilience this September, with prices increasing by 6% and 4%, respectively, despite the historical trend of a monthly decline in the cryptocurrency market. This year, the anticipated downturn, often referred to as the September slump, appears to be less pronounced, sparking optimism among traders and analysts alike.
Recent options data reflect a bullish sentiment, indicating that the number of bets favoring price increases outweighs those predicting declines. This positive outlook is primarily based on the expectation of multiple Federal Reserve rate cuts in 2025, which is bolstering the appetite for riskier assets like cryptocurrencies.
Sean Dawson, head of research at the on-chain options platform Derive, noted that the common assumption of having reached the peak of the current market cycle may be premature. He asserted that while there may still be volatility and challenges ahead, especially as the U.S. financial year-end approaches, there remains substantial potential for a year-end rally. “I believe we are only halfway through what could be a significant upswing in the fourth quarter,” Dawson stated, referencing supportive macroeconomic trends and the current options landscape.
Despite a slight downturn for Bitcoin, which fell approximately 1.29% from a recent peak of $116,245 to $114,770, the long-term perspective remains optimistic. Ethereum, on the other hand, could face pressure related to treasury markets, as the valuations of some treasuries have fallen below one. This could lead institutions to divest from their underlying assets to repurchase shares, impacting the cryptocurrency’s value.
Dawson highlighted that the options data showcases a ratio of nearly 2.5 to 1 in favor of call open interest for Bitcoin, emphasizing the bullish positioning among investors. Recent data from Polymarket revealed a significant shift in anticipated rate cuts, with the likelihood of three cuts before year-end surging from 22% to 49% in two weeks. The probability of four cuts, amounting to a full percentage point, has similarly increased, surpassing 10%. These adjustments typically favor risk assets, such as cryptocurrencies.
Analyzing expected price outcomes, the market assigns a 40% probability that Ethereum will close above $5,000 by the end of the year and a 20% chance that it will reach above $6,000. For Bitcoin, there’s a 37% probability of prices hitting $125,000 or more during the same timeframe.
In summary, while September’s historical trends suggest the potential for further volatility, both Bitcoin and Ethereum are showing promising signs of resilience. Investors and analysts are cautiously optimistic, with the landscape indicating that the final months of the year could bring more favorable conditions for the crypto market.
