• September is seen as a key moment for crypto, as most assets witnessed a decline.
• Market sentiment is currently in a state of fear, which could impact the trend this month.

In recent weeks, Bitcoin [BTC] has experienced significant price volatility, leading to a drop below the psychological $60,000 level.

While this decline has impacted the overall cryptocurrency market, it also presents the potential for a crypto bull run, particularly as we move into September—a month historically known for negative trends in financial markets. 

However, several indicators suggest that this September might break the pattern and herald a bullish phase for cryptocurrencies.

Exchange reserve declines

One of the key indicators supporting the case for a potential crypto bull run is the declining exchange reserves of Bitcoin and Ethereum [ETH]. 

Historically, when the balances of these assets on exchanges decrease, it suggested that investors were moving their holdings to cold storage.

This indicated a long-term holding mentality rather than a desire to sell. This trend often precedes a bull run, as it reduces the available supply of these assets on exchanges, creating conditions for upward price pressure.

As of this writing, Bitcoin’s exchange reserves were around 2.62 million, continuing a downward trend. Similarly, Ethereum’s reserves have also declined to approximately 18.7 million.

This pattern of declining reserves, which intensified towards the end of the previous year and has persisted into the current year, could be setting the stage for a significant price rally.

Market sentiment: Fear as a precursor to greed

Another factor pointing towards a potential crypto bull run is the current market sentiment, measured by the Crypto Fear and Greed Index.

This index gauges the overall sentiment in the market, where extreme fear can indicate a buying opportunity and extreme greed might suggest a market top. Historically, a shift from fear to greed often precedes a bull run.

According to data from Coinglass, the market is currently in a state of fear.

This sentiment creates an environment ripe for a bull run, as fear often leads to capitulation, followed by a shift to greed as prices begin to recover.

The cyclical nature of market sentiment suggests that a bullish phase could be imminent after a period of fear.

MVRV ratio: A signal for a bull run

The Market Value to Realized Value (MVRV) ratio is another critical indicator that points to a potential bull run. The MVRV ratio measures whether the market value of an asset is above or below its realized value.

When the MVRV is below zero, it typically indicates that holders are at a loss, suggesting the asset is undervalued and may be due for a correction.

As of this writing, Bitcoin’s 180-day MVRV was around -9.6%, indicating that long-term holders were holding at a loss of over 9%.

Similarly, Ethereum’s MVRV has been below zero since July, with the current MVRV around -23%, meaning holders are at a loss of over 23%.

These negative MVRV levels suggest that both assets are significantly undervalued, and a correction above zero could trigger a bullish run.

Support and resistance levels

From a technical analysis perspective, Bitcoin’s price was below its 50-day and 200-day moving averages, indicating that the market is in a bearish or consolidation phase.

However, a move above these moving averages could signal the beginning of a new bullish phase.

The Fibonacci retracement level of 61.8%, currently acting as significant support around $52,016.20, is also crucial.

Bitcoin has tested this level and is trading above it, suggesting that holding above it could result in a bullish trend’s resumption. 

Additionally, the 38.2% retracement level, acting as resistance around $58,140.61, is another key level to watch. A break above this level could trigger further upside, signaling the start of a bull run.

Open interest and volume

Open interest and trading volume are also essential metrics to consider when assessing the potential for a crypto bull run.

At the beginning of the year, a crypto bull run culminated in March, with Bitcoin reaching its all-time high of around $73,000.

During this period, Open Interest and volume were on the rise, with the former peaking at over $75 billion and volume at over $199 billion.

Open Interest declined to around $50 billion as well, and volume having fallen to approximately $100 billion.

However, if these metrics begin to rise again, especially in conjunction with bullish sentiment, it could indicate the onset of a new bull run.

A crypto bull run in September ahead?

While September has historically been challenging for the crypto market, several indicators suggest that this year could be different.

Read Bitcoin’s [BTC] Price Prediction 2024–2025

Declining exchange reserves, a market in fear, deeply negative MVRV ratios, and key technical levels all indicate the possibility of a crypto bull run shortly. 

As Bitcoin and Ethereum continue to shape the broader market trend, the coming weeks could be pivotal in determining whether the market will shift from fear to greed, potentially leading to significant price gains.