Bitcoin Drops Below $58K to Kickoff Historically Brutal September

To kick off a return from a quiet Labor Day weekend, Bitcoin's price action broke below $58,000 and Ethereum is breaking through a seven-month low.

Historically, September has been a tough month for Bitcoin — the only month since 2011 that has averaged a negative return. Despite the current challenges, bullish sentiment remains, with some analysts like Fundstrat’s Sean Farrell sticking to their guns on a potential $115,000 price target by the end of 2024.

As we enter this difficult period, all eyes are on the Fed’s upcoming decision on interest rate cuts, which could influence the broader market and Bitcoin’s trajectory.

Per usual, you can watch us discuss these topics and more in this week’s Live Crypto News Recap above. Let’s get into it!

Ethereum ETFs Struggle as Volumes Decline

Ethereum hasn’t fared any better than Bitcoin recently, with its price dipping below $2,500 and trading volumes for Ethereum ETFs continuing to fall off a cliff. According to CoinShares, Ethereum ETFs saw just 15% of the trading volumes during their debut week back in July. Outflows across all crypto investment products last week totaled $305 million — breaking three weeks of inflows.

The summer months have been historically slow, and this year is no exception, with Ethereum’s daily revenue from fees hitting a 2024 low. The rise of Layer-2 solutions have made Ethereum transactions cheaper, but that comes with the downside of reduced revenue for the network. While lower fees could lead to broader adoption and more use cases, the immediate impact on Ethereum’s price narrative has been negative. Until we see more meaningful projects and transactions on Ethereum’s mainnet, the trend might continue downward.

For what it’s worth, Sean Farrell is sticking with his price call for Ethereum to top $6,500 by the end of the year.

Binance Executive’s Nightmare in Nigeria Intensifies

In a more troubling development, Binance executive Tigran Gambaryan is facing deteriorating health conditions while being detained in Nigeria. Recently, footage emerged showing him struggling as he was escorted into court, raising concerns about his treatment.

Binance’s new CEO, Richard Teng, has publicly condemned the situation, calling for Tigran’s release. This incident is escalating into a significant issue, with U.S. officials now involved as his family pleads for his return. The crypto community is closely watching this case, as it highlights the broader geopolitical challenges faced by industry leaders.

Trump Gains Ground with Crypto Voters

On the political front, President Trump seems to be gaining traction with crypto voters, according to a recent poll from Farleigh Dickinson University.

The poll shows Trump leading Kamala Harris by 12 points among likely crypto voters, 50% to 38%. As we’ve covered, former President Trump (and his family) has continued to lean into being pro-crypto, but this poll seems to be the first showing the fruits of that courtship.

However, VP Kamala Harris still holds the lead among non-crypto holders, so it remains to be seen how much further Trump can push this advantage as we head into the next debate on September 10.

Interest Rates in Focus

As we move further into September, the focus is squarely on interest rates, with the market eagerly anticipating the Fed's first rate cut since March 2020.

The upcoming jobs report for August on Friday, which is expected to show a gain of 165,000 jobs and a dip in the unemployment rate to 4.2%, will be crucial in determining the size of the expected interest rate cut.

Current market sentiment, supported by both the Fed Watch tool and prediction markets like Polymarket, suggests a 25-basis point cut is the most likely outcome. However, with 15 days until the Fed’s decision, all eyes will be on the labor market data to see if this expectation holds or if the Fed might be pushed toward a more significant adjustment.

Bitcoin's correlation with macroeconomic indicators means that any unexpected moves by the Fed could have a ripple effect on its price as we navigate the historically challenging month.

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