Macro crypto currency market outlook

Bitcoin remains in recovery mode out from the 2022 low. At the moment, the market has entered a period of consolidation. Ultimately, however, look for setbacks to hold up above $25,000 on a monthly close basis, ahead of the next major upside extension back through the yearly high.

Crypto performance for the month of September was relatively flat, with both bitcoin and ether looking to settle the month around where they were as the month got going. Bitcoin was mostly unchanged, while ether was down marginally.

The lackluster performance is somewhat encouraging when considering seasonality trends. September is known to be the worst month on record for bitcoin performance. So, the fact that the crypto asset has held up well in the face of this metric can be taken as a victory for crypto investors.

This victory is all the more impressive when considering how bitcoin stacked up against traditional assets in September. Looking at 30-day performance across bitcoin, the major currencies, gold, and the S&P500, bitcoin is far and away the strongest performer.

The focus in September has little to do with any major developments from within the crypto space, and so much more to do with developments on the global macro front. Currencies were hit hard, and stocks sold off on the back of a higher for longer Fed policy communication, surging US yields and worry around stagflation risk.

And yet, even with yield differentials moving decidedly in the US Dollar’s favor, and even with equity investors heading for the exits, bitcoin was able to hold its own.

This reflects a maturing market becoming more acutely aware of the longer-term value proposition of bitcoin and other crypto assets. We’ve also been seeing signs of a shift in sentiment amongst lawmakers in the US, with calls for the SEC to approve bitcoin ETF applications ramping up.

At this point, the SEC is taking its time, and it doesn’t look like any applications will be approved before year end. However, momentum is building, and the market believes it’s only a matter of time before the approvals come through, which should usher in an overdue and welcome wave of institutional adoption in 2024.