Bitcoin could experience a correction below $50K this September, analysts warn, as ongoing market weakness and reduced trading volumes heighten the risks of further declines. The cryptocurrency has already seen a significant drop since August.

September Could Bring $50K Bitcoin Correction

Despite being in a decline for more than two weeks, the Bitcoin price has failed to gather any traction. Cointelegraph data shows that the token's value has dropped by more than 12% since August 26th, and at of 11:24 am UTC, it is trading at $56,133.

Bybit exchange's chief of content, Cyrus Ip, has speculated that this dynamic would pave the way for a Bitcoin decline below $50,000.

Analysts Highlight Risk from Low Liquidity

Interviewed by Cointelegraph, Ip stated:

“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.”

Bitcoin Below $50K Could Trigger Deeper Lows

Round amounts, such as $50,000, attract a lot of attention from investors. If the price of Bitcoin drops below $50,000, it might lead to a dramatic decline in market sentiment and even deeper lows.

New onchain exchange data suggests that crypto investors are taking a break.

Both Bitcoin and Ether have seen a steady fall in open interest and trading volume after August's devastating $510 billion crypto market sell-off, according to a study published on September 4th by Bybit and Block Scholes. The analysis states:

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

Support Levels at $52K and $55K Before Major Correction

Ip explained that despite the fact that this might lead to a Bitcoin decline below $50,000, the cryptocurrency still has two major support levels:

"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.”

Historically Negative Performance for Bitcoin in September

September has a history of negative volatility; according to CoinGlass statistics, the average return for Bitcoin in September is -4.69%, making it the most bearish month overall.

According to Bitfinex analysts, the true bull rally might begin after a dip below $50,000, which could be caused by the historic performance and a possible US rate cut.

Bitcoin Market Cycles Show Reduced Peaks and Corrections

What the experts revealed to 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.”

Bitcoin prices are being pushed down by the negative inflows from US spot Bitcoin ETFs.

According to data from Farside Investors, US ETFs have been experiencing a seven-day streak of net outflows, including a significant outflow of over $211 million on September 5th.