Bitcoin is poised to end August on a down beat despite the crypto industry scoring a milestone win on the regulation front. The cryptocurrency could be mired in a range during September, market participants say. The cryptocurrency is on pace for a 10% decline this month, according to Coin Metrics. Bitcoin recently jumped 7% after a federal appeals court sided with Grayscale over the U.S. Securities and Exchange Commission in a key crypto exchange-traded funds case. However, that wasn't enough to lift the flagship crypto back to the $29,000 level. Investors are grappling with thin trading volumes and liquidity. While crypto investors have a lot to cheer about, it hasn't been reflected in prices, and bitcoin could remain rangebound throughout September. "If bitcoin can get some follow through, we should see price retesting resistance at 29.5-30k in the coming weeks," Rob Ginsberg, analyst at Wolfe Research, said in a note Wednesday. "We ultimately expect it to shoot through that level and begin a new leg higher, but failure to successfully punch through and we will likely be discussing that crucial $25,000 support level once again." "These drawdowns YTD have been saved by swift legs higher, largely driven by catalysts," he said. "We saw the latest one [Tuesday] with Grayscale's favorable bitcoin spot ETF ruling. This should open the door for large institutions to get more involved, which further bolsters our long-term bullish view." Will Tamplin from Fairlead Strategies said the initial jump higher is associated with upturns in the firm's short-term indicators. He added that it supports "follow-through in the coming days within the context of bitcoin's trading range." In the medium term, bitcoin could see more consolidation similar to its May and June down moves. Tamplin said he sees the next key level to test at $28,800. After that, $31,900 would be the level to watch. Bitcoin has been drifting between $25,000 and $30,000 since the banking crisis fueled a rally in March , with brief moves above $30,000 that have failed to hold. Although individual regulatory developments have served as upward baby steps, the overall lack of regulatory certainty continues to hold the market back. "Also, keep in mind September has historically been a down and volatile month for the equity markets and crypto has mostly followed that pattern," said Cantor Fitzgerald's Elliot Han. Han noted that bitcoin's biggest loss came in the September before the 2020 halving . Bitcoin's halving cuts the reward for mining the cryptocurrency, and it's expected to take place again in spring 2024. "Any beneficial news on U.S. regulation will be positive, but aside from the ETF applications, none is expected," he added. "This doesn't mean we cannot get surprised to the up or downside though." All eyes on Washington September kicks off with an anticipated update from the SEC on at least one spot bitcoin ETF application. The SEC is expected to give responses to filings from Bitwise, BlackRock, Fidelity, VanEck and others as early as September. On Thursday afternoon, the agency delayed its decisions on bitcoin ETF applications from WisdomTree and Invesco. "The regulatory landscape is really important for this next phase because the institutions that are looking at this want to see more regulation than currently exists on the books today," said Kristin Smith, CEO of the policy-focused Blockchain Association. "They're worried about if they jump in too soon without the right framework in place that it'll end up coming back to bite them." "This kind of legislative progress has really caught the attention of traditional finance institutions and maybe they had been looking at this before and they were putting it on the backburner, but this is forcing them to want to be in place when legislation ultimately does come into law," she added. — CNBC's Michael Bloom contributed reporting.