Key Points
- Historically, Bitcoin has recorded losses in 8 out of the last 13 Septembers, with an average decline of 2.97%, making it the least favorable month for returns.
- The month of September 2025 broke this trend with a 5.16% gain, marking Bitcoin's third consecutive month of growth, but October soon turned negative following a tariff threat from Trump, resulting in $19 billion in liquidations.
- As September 2026 begins, Bitcoin is priced around $77,500 after a nearly 25% increase in August, amidst speculation of a potential rate hike by the Fed and additional pressures from the midterm elections.
Investors in Bitcoin have faced losses in eight of the past thirteen Septembers. The S&P 500 has similarly shown a trend of losses in September, averaging declines since 1945, a pattern that dates back to 1928 according to research by Yardeni.
While Bitcoin did not originate this phenomenon, it has certainly become part of it.
Myriad: What’s next for Bitcoin? Make your prediction.Known among crypto traders as "Red September," this recurring market trend isn't merely superstition; it's a persistent data pattern that affects both Bitcoin and traditional stock indices.
But what causes this trend?
Understanding the Trend
Since 2013, Bitcoin has closed lower in September eight times out of 13 years, yielding a 38.5% success rate according to data from CoinGlass. The average September return sits at a negative 2.97%, with a median return of negative 2.44%, indicating that a typical September is likely to result in losses.
Bitcoin monthly returns. Image: CoinglassJune is the only month that comes close, averaging a smaller loss of 1.59% during the same period. In contrast, October stands out as the best month, boasting an average return of 19.92% and a median of 14.71%, which has led to its reputation as "Uptober" among crypto enthusiasts.
August's statistics deserve attention as well; while its average return is a respectable positive 2.82%, the median return is negative 6.99%. This suggests that most Augusts result in losses, with only a few exceptional years lifting the average.
A Broader Market Trend
This phenomenon isn't limited to the crypto market. The S&P 500 has experienced an average decline of approximately 0.6% in September since 1945, according to research from Chase, making it the only month with a long-term negative average. When looking back to 1928, the average loss worsens to around 1.1% to 1.2%.
There is no consensus on the reasons behind these trends. Some theories suggest that mutual funds liquidate poor performers in September to offset tax losses as their fiscal year closes on October 31. Others propose that institutional investors returning from summer holidays engage in simultaneous de-risking, coinciding with the Fed's mid-month meetings that often contribute to market volatility.
These explanations, however, do not directly account for Bitcoin's behavior, which lacks a fiscal calendar or summer recess, yet still functions as an investment asset.
This year presents additional complexities. The year 2026 is a midterm election year, and historical data shows that the average U.S. stock market low during midterm cycles has occurred around September 2, with average drawdowns of nearly 17% from previous highs before markets recover. Bitcoin's market behavior is more aligned with high-beta tech stocks, indicating that this correlation influences both directions.
Reviewing Last September's Performance
Last September's performance followed the expected script initially but then diverged. Bitcoin began the month around $108,000, with an oversold RSI close to 38. According to DYOR CEO Ben Kurland, the concept of Red September is "more myth than math."
However, the math prevailed early on. By mid-September, a significant downturn erased approximately $162 billion from the total crypto market cap, pushing Bitcoin down to around $112,000, briefly dipping to an intraday low near $111,986. Traders on Myriad, a prediction platform created by Decrypt's parent company Dastan, assessed nearly 60% odds of another negative day at that point.
Bitcoin price data. Image: TradingviewDespite this, Bitcoin managed to recover. ETF inflows contributed to this rebound, with CryptoQuant noting that long-term holders were moving coins into ETFs, which was seen as a bullish signal. Bitcoin ultimately closed the month up 5.16%, marking its third consecutive positive September.
October's Downturn
This recovery was short-lived. Bitcoin reached a new all-time high above $126,000 on October 6, reinforcing the "Uptober" narrative. However, this was quickly undermined on October 10 when President Donald Trump announced potential 100% tariffs on Chinese imports, causing crypto markets to react sharply. Within 24 hours, approximately $19 billion in margin positions were liquidated, affecting 1.6 million traders, prompting market maker Wintermute to cease trading due to breaking its internal risk protocols.
Bitcoin fell from above $121,000 to briefly under $102,000 that day, dragging down altcoins even more severely. Some layer-2 tokens lost up to 70% within hours. October ended down 3.69%, marking only the third negative October since 2013. This downturn continued into November, which saw Bitcoin's worst performance since 2018, with a 17.67% decline, leading to a 21-month low around $59,300 by June of this year. This period has been referred to by crypto traders as the crypto winter.
Thus, last year deviated from the norm, featuring an "Uptember" followed by a "Red October," contrary to typical market behavior.
Current Bitcoin Landscape
As September begins, Bitcoin is trading near $77,500, slightly down after concluding August with a nearly 25% increase, its best August since 2021. The rally has encountered resistance just below the $81,455 to $82,538 range, with support levels identified between $73,670 and $75,157.
Bitcoin price data. Image: TradingviewThe broader macroeconomic environment has shifted significantly since spring. Fed Chair Kevin Warsh highlighted in his recent Jackson Hole speech that the PCE price index is currently rising at an annual rate of 3.7%, accelerating over the past six months. The odds of a rate hike in September now stand at 68.2%, according to CME’s FedWatch tool. Additionally, the 30-year Treasury yield reached 5.28% in late August, a level not seen since before the 2008 financial crisis.
Gold has been on the rise alongside Bitcoin, indicating that the driving force behind this trend may not be risk appetite but rather a trend of investors seeking to hedge against a potentially persistent inflationary environment while the Fed might continue its monetary easing. The SEC's proposed Regulation Crypto Assets rule, announced on August 18, adds an unusual regulatory boost to an otherwise volatile environment.
The next significant date to watch is September 15 to 16, when the Fed will announce its decision on whether to implement the first rate hike since its tightening cycle began in 2022-2023, a period during which Bitcoin fell approximately 65% to a low of $15,500 in November 2022.
Disclaimer
The views and opinions expressed are solely those of the author and are intended for informational purposes, not as financial, investment, or other advice.