Blood Moon: A Negative Sign for the crypto market

September is usually considered the “bear” phase of the crypto market. However, the current bullish cycle shows many different signs. The involvement of giants like BlackRock, Strategy, Fidelity, along with numerous large financial institutions, has significantly changed the market landscape. On the flip side, several governments are also starting to consider including Bitcoin and other top cryptocurrencies in their strategic reserve portfolios.

Interestingly, many “whales” and large investors in the crypto market place special trust in astrology. Coincidentally, the world witnessed the phenomenon of a “blood moon” last night - a rare type of lunar eclipse. Against this backdrop, Bitcoin is fluctuating around the threshold of 111,000 USD, while top analysts continuously warn of the possibility of a strong correction.

From another perspective, September is also seen as a crucial period when the market is waiting for the Federal Reserve (Fed) to cut interest rates by at least 0.25 basis points. Economic data such as CPI, PPI, and unemployment rates are all sending positive signals, reinforcing expectations for a cut. However, analysts warn that a “sell the news” scenario could very well occur, as most of the expectations have already been priced in by the market. A strong correction may appear before the bullish trend is extended.

Notably, the wave of selling from tech leaders is causing many concerns. The CEO of Microsoft has divested 15% of his shares, and shortly thereafter, the CEO of NVIDIA took similar action. These are signals that investors can hardly ignore. In fact, interest rate cuts do not always equate to growth – history shows that many countries have fallen into recession immediately after this step was taken. Not to mention, the global picture is overshadowed by a series of geopolitical risks: from the Russia-Ukraine conflict, the Israel-Gaza conflict to other simmering instabilities.

Bitcoin breaks through the “important support line”

In technical analysis, the 50-day EMA line has long been regarded by experts as the “golden line” due to its incredible accuracy. Throughout the months of June, July, and August, whenever the price touched the 50-day EMA line, the market immediately bounced back. However, by September, that solid wall was breached, even being tested again, turning the strongest support level into a dangerous resistance level. Currently, the 50-day EMA is acting as a key barrier, signaling that the market is likely to enter a major correction phase, which could fluctuate between 15% and 25%.

BTC/USDT daily chart | Source: TradingViewNonetheless, this is not necessarily bad news. The financial market never moves in a straight line, and a correction – if it happens – will play a necessary cleansing role, both regenerating strength and adding liquidity. But the big question is: could this be the peak of the cycle? As the “big players” gradually withdraw, are they holding information that the majority is unaware of? Clearly, there is still a lot of undisclosed internal data. And to mitigate risk, the wisest choice for investors is still to follow the big money – because when you walk with them, you will never be left behind.

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