Bitcoin has closed one of its worst-performing months in history. Since the day BTC was launched, September has typically been a time when the price has plummeted. This situation was no different in September 2022. The leading cryptocurrency has lost nearly 3% during the month. But this was surprisingly the best September Bitcoin has had since 2016. We’re now in October and the asset is giving a buy signal, according to consulting firm Motley Fool.
Leading cryptocurrency has historically had a good month
Bitcoin generally tends to cool as autumn arrives. But October, November, and December make up some of the best performing months. For this reason, investors don’t care for the weather to get colder at the moment. During Bitcoin’s existence, October saw an increase of almost 27%. The leading cryptocurrency has dropped in just three Octobers of the last 10 years. These figures make October the third best performing month for BTC.
However, November is not inferior to October. November brought the Bitcoin price an average increase of around 40% to date. This is the leading cryptocurrency’s historically best-performing month. So, will BTC rise in 2022 like in previous years? Bitcoin’s decline in 2022 was driven by the rise in global inflation and the Russia-Ukraine war. Therefore, it would be safe to assume that an asset like Bitcoin will not see any price increases until inflation is under control.
Bitcoin, inflation and interest rates
The Fed has increased interest rates four times in 2022. There are now encouraging signs that the Fed’s approach to fighting inflation by raising interest rates is having the desired effect. When interest rates rise, the economy cools. Thus, consumers spend less and companies borrow less. This, in turn, causes inflation to eventually slow down. Several new factors are generating speculation that the Fed may now return from monetary tightening. If this happens, the demand for cryptocurrencies will increase.
New York Fed Chairman John Williams gave a speech in Phoenix this week. Williams made some important announcements about supply chain issues and inflation. According to him, inflation should drop to about 3% by next year due to current strategies. This is not the 2% rate the FED is targeting. However, it is extremely good compared to the current 8%. If the economy proceeds this way, central banks could raise interest rates less worldwide. If this happens, it will have extremely positive consequences for BTC.
The best days for Bitcoin (BTC) may be ahead
2022 has been a brutal year for Bitcoin and the general cryptocurrency market. As we reported on Kriptokoin.com, BTC has fallen by over 70% since its highs in November 2021. Still, there really does seem to be some light at the end of the inflationary period. Therefore, we can expect riskier assets like Bitcoin to finally breathe.
Those who take the bottom will of course be the winners the most. At this time, investors should not make long-term decisions based on short-term events. However, it is possible that October will be shaped like other October in Bitcoin history. Especially if the Fed starts to change its approach, entry at today’s prices will minimize risk. This can make it possible to achieve maximum profit.
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