Tomiwabold Olajide
On-chain data suggests a historical trend that could benefit XRP and BTC traders
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In a tweet, Santiment, an on-chain analytics firm, points to a historical trend that could benefit patient crypto traders.
Due to a decline in cryptocurrency trading activities, there is currently lackluster trading activity in the crypto market. Total monthly volume of spot and derivatives trading fell 11.5% to $2.09 trillion in August, the second lowest level since October 2020, indicating waning investor interest.
Adding to this negative outlook is the fact that September is often a “red month” for cryptocurrencies such as XRP and BTC.
XRP is reportedly facing the “Red September” conundrum, with the ninth month often ending in losses. Since 2013, XRP has only had four positive Septembers, the remaining six were negative.
Bitcoin, the largest cryptocurrency by market capitalization, appears to be in the same boat.
September had the fewest positive returns for Bitcoin at just two months, and BTC is currently on a six-year negative return streak. According to the monthly return chart, Bitcoin has experienced six consecutive “negative Septembers” since 2016.
Here’s how things could change
XRP, the fifth-largest cryptocurrency, is down 1.61% so far in September, while BTC is down just 0.39%.
Given the historical pattern noted in September, on-chain analytics firm Santiment observed a significant increase in bearish trends. Historically, this has been a good thing for patient traders. This is because prices are more likely to rise when the crowd is pessimistic.
“As crypto markets remain unpredictable, we saw a sharp increase in pessimistic sentiments from the crowd here in September. Historically, this is a good thing for patient traders. Probability of price jumps increases after FUD reaches majority,” tweeted Santiment.
At the time of writing, BTC has fallen marginally by 0.28% to $25,831 in the last 24 hours; XRP rose marginally by 0.28% to $0.502 in the last 24 hours.
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