Bitcoin had a tough September. Here are the key metrics to watch next

Bitcoin is about to close September with a double-digit loss compared to August. As market sentiment continues to weaken, the top cryptocurrency needs to hold on to a key support level to avoid a major correction.

Bitcoin in danger

Bitcoin is consolidating around the $19,000 support level. Market participants have noticed the top crypto’s weak price action in recent weeks.

Market sentiment towards Bitcoin remains negative. Social data from Santiment shows a weighted sentiment score of -0.69, while talk of Bitcoin on social media is below 20%, indicating that interest has waned.

Brian Quinlivan, director of marketing at Santiment, noted the trend in a September 30 summary report, pointing out that “the world remains in a very fragile place and traders don’t trust much of anything to rise any time soon.” Crypto has suffered along with other risky assets throughout this year amid soaring inflation rates, interest rate hikes, a global energy crisis and market exhaustion on the back of the 2021 bull market.

The declining interest in Bitcoin can also be seen from a chain perspective. According to Glassnode data, the number of addresses with at least 1,000 BTC has remained stable at around 2,117 addresses for the past three days, after a sharp decline of 26.75%. This market behavior suggests that prominent investors have lost interest in accumulating more coins.

A similar trend plays out with miners. According to CryptoQuant data, Bitcoin miners’ reserves have plateaued at 1.86 million tokens, staying around this level for nearly a month. The inactivity among miners follows a significant sell-off in August.

Despite the data showing a bleak outlook for the number one crypto, the number of new daily addresses created on the network suggests that the top crypto could be turning around. The Bitcoin network is expanding, showing an increase in retail interest since mid-July. The bullish divergence between network growth and the asset’s price points to a potential improvement in momentum in the future.

If network growth reaches a higher level with a seven-day average of more than 417,000 addresses, the bullish narrative can be validated.

Transaction history shows that BTC established a critical support level of $19,000, where 1.21 million addresses bought over 688,000 BTC. This wall of demand must hold to prevent a steep correction. If it fails to hold this level, a sell-off could follow, potentially sending BTC to $16,000 or lower.

IntoTheBlock’s IOMAP model shows Bitcoin facing several areas of resistance going forward. The most significant is at $20,000, where 895,000 addresses hold nearly 470,000 BTC.

It’s been a tough year for the markets, and crypto hasn’t been spared in the fallout. While Bitcoin is now almost a year into a brutal bear market, several signs suggest that the pain may not be over. Even as new entrants join the top crypto network, the global macro picture, declining sentiment and interest in miners, and recent price action suggest there is no clear reason for the Bitcoin narrative to turn bullish anytime soon.

Disclosure: At the time of writing, the author of this piece owned BTC and ETH. The information in this piece is for educational purposes only and is not investment advice.