Bitcoin set for sub $50K correction in September: Analysts

Bitcoin could extend its summer crab walk into September, with a potential correction below the key $50,000 psychological mark.

Bitcoin’s ( BTC ) price has been struggling to gain momentum due to an over two-week downtrend. The token has fallen over 12% since Aug. 26 to trade at $56,133 as of 11:24 am UTC, according to Cointelegraph data.

BTC/USD, 1-month chart. Source: Cointelegraph

This dynamic could set up Bitcoin for a correction below $50,000, according to Cyrus Ip, the head of content at Bybit exchange.

Ip told Cointelegraph:

“The data suggests this as the course of least resistance as things stand. However, these things can change very quickly if a new catalyst or headline emerges, especially in a low liquidity environment.”

Round psychological numbers like $50,000 invite significant investor attention. Crypto investor sentiment could take a significant hit and invite lower lows if Bitcoin price falls below $50,000

Related: Crypto venture capital funding surges to $633M in August rebound

Bitcoin holds significant support at $55k and $52k

Crypto investors seem to be taking a breather, based on the latest onchain exchange data.

Following August’s brutal $510 billion crypto market sell-off , open interest and trading volume have been in continuous declines for both Bitcoin and Ether ( ETH ), according to a Sept. 4 research report by Bybit and Block Scholes, which wrote:

“Open interest for perp options has been on a steady downward trend. In addition, we notice a parallel downward trend in trading volumes.”

Bybit Perp BTC and ETH Open Interest. Source: Bybit and Block Scholes

While this could set the stage for a Bitcoin correction below $50,000, BTC still holds two significant support levels, explained Ip:

As for price targets, if you look at support levels, there are still $55,000 and $52,000 that are notable support levels before we reach $50,000.”

Related: Total crypto market sinks below $2T as analysts eye Bitcoin reversal below $54K

ETF outflows and historic data threaten sub $50,000 BTC in September

September has historically been a month of downside volatility, with average Bitcoin returns at -4.69%, making it the most bearish month based on average returns, according to CoinGlass data.

Bitcoin monthly returns percentage. Source: CoinGlass

The historic performance, along with a potential rate cut in the US, could set the stage for a correction below $50,000, before the real bull rally, according to Bitfinex analysts.

The analysts told Cointelegraph:

“This is not an arbitrary number but based on the fact that the cycle peak in terms of percentage return reduces by around 60–70% each cycle, and the average bull market correction has reduced as well.”

Negative inflows from the US spot Bitcoin exchange-traded funds (ETFs) are also pressuring Bitcoin prices.

Bitcoin ETF Flow (USD, million). Source: Farside Investors

The US ETFs have recorded seven days of continuous net outflows, with over $211 million worth of outflows on Sept. 5, according to Farside Investors data .

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