Analysts have questioned whether November deserves its reputation as Bitcoin’s historically “strongest month” after the cryptocurrency dropped 10% over the past seven days and briefly sank below $90,000.
“Historical averages suggest strength, but those numbers are skewed and the current backdrop is anything but normal,” James Harris, the CEO of crypto yield provider Tesseract, told Cointelegraph.
Harris said that while the break below the long-term average is noteworthy, it is “not the full picture.”
Bitcoin (BTC) is down 15.37% since the start of the month and is on track for its worst November since 2019, when it closed the month down 17.27%, according to CoinGlass.
Bitcoin is trading up 1% over the past day at $93,290, climbing from a low of under $89,400, according to CoinMarketCap.
Harris said comparing the current market environment to previous years “is not like-for-like,” and noted that the US government shutdown had delayed key economic data for six weeks.
“When it reopened, the backlog of information forced investors to reprice inflation and rate expectations almost overnight,” he said.
Confidence among market participants in a Federal Reserve rate cut in December has also plummeted to 41%, according to the CME FedWatch Tool.
New Bitcoin high by year-end possible, but unlikely
Harris said it’s still possible for Bitcoin to reclaim momentum and push to new all-time highs before the end of the year, but he isn’t betting on it.
“It is possible, but not something we are forecasting,” he said.
Bitcoin last reached an all-time high of $125,100 in early October, prompting traders to look toward November, historically its strongest month, for a potential continuation of the rally.
Bitcoin has seen an average return of 41.35% in November since 2013, a figure inflated by a 449% surge in 2013, which is about 277% higher than that year’s second-strongest gaining month, March.
Bitcoin showing “early signs of stabilization”
Bitfinex analysts believe that the worst of Bitcoin’s drawdown may be nearing an end.
“It feels like it is time for a local bottom to be established relatively soon,” the analysts said in comments shared with Cointelegraph.
“Across multiple historical cycles, sustainable bottoms have only formed after short-term holders have capitulated into losses and not before,” they added.
However, the November gains traders are hoping for may spill into December instead. The Bitfinex team said that selling pressure is beginning to ease, with “early signs of stabilisation following one of the sharpest corrections of the cycle.”
Analysts at crypto payments firm B2BINPAY agreed that “a durable recovery can form just as quickly.”
“The first meaningful resistance is at the $97,000–$100,000 band,” they said. “Until BTC attempts to reclaim it, sentiment is highly likely to stay defensive.”
US won’t start Bitcoin reserve until other countries do
The US government is unlikely to start accumulating Bitcoin for its strategic reserve until other nations make the first move, says crypto entrepreneur Mike Alfred.
Alfred said in a podcast published on Tuesday that the US government will start putting Bitcoin (BTC) into its reserve created earlier this year “when there is enough pressure externally.”
“Once the US government recognizes that others are taking action before them, that’ll probably catalyze additional action in the future,” he said, adding that the timeline for the US government’s action is up in the air.
It comes as other industry executives have been pushing for the US government to step up its pace of accumulating Bitcoin to avoid the stockpile’s size falling behind other nations.
Most governments will have Bitcoin when it’s worth $1 million
Alfred said that he was confident that Bitcoin would be worth $1 million a coin by 2033, a more conservative estimate compared to ARK Invest CEO Cathie Wood and Coinbase CEO Brian Armstrong, who anticipate Bitcoin will be worth seven-figures by as early as 2030.
“I think by the time that happens, almost every government will have some direct or indirect exposure to the asset, and it will be viewed as a common strategic reserve type of asset,” Alfred said.
US President Donald Trump signed an executive order in March directing the creation of a Strategic Bitcoin Reserve that would use budget-neutral ways to accumulate the cryptocurrency, but the plan has yet to be formally established.
In September, Galaxy Digital analyst Alex Thorn said there was a “strong chance” the US will announce this year that it has formed a Bitcoin reserve and is “formally holding BTC as a strategic asset.”
US government risks being “front-run,” says Bitcoiner
Alfred added that it “seemed impossible that the government would even acknowledge Bitcoin before Trump.”
“I think we’ve made quite a bit of progress in a short period of time,” he said.
Others are urging the government to move even faster. Jan3 founder Samson Mow told Cointelegraph in June that the US “has to start” acquiring Bitcoin this year or risk being “front-run” by nations such as Pakistan, who are also planning to acquire Bitcoin.
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