Bitcoin's "Red September": Why Seasonality Matters

Bitcoin has historically underperformed in September, with prices declining in 8 of the past 11 years. This trend, often called "Red September," is attributed to factors like profit-taking after summer rallies, investors covering fall expenses, and a self-fulfilling prophecy where defensive trading amplifies declines.

Historical Context: Most September pullbacks are relatively mild and often form a "local bottom," setting the stage for a strong rebound in Q4, known as "Golden October."
Recent Volatility: In August 2025, Bitcoin hit an all-time high of $124,533 but later dropped 11% to around $110,000, erasing nearly $200 billion in market value. This was triggered by a large whale selling 24,000 BTC.
Market Conditions: Thin order books and reduced capital inflows have made the market prone to large swings. Nearly $900 million in derivatives positions were liquidated during the recent drop.
Macro Influences: Traders are closely watching the U.S. Federal Reserve's September policy decisions, hoping for positive signals like interest rate cuts to boost optimism.
September Scenarios: Analyst Cas Abbé outlines three potential outcomes for Bitcoin in September: sideways consolidation between $110,000-$120,000 (40% probability), a drop below $110,000 triggering further liquidations (35% probability), or a quick recovery fueled by institutional buying (25% probability).

Despite the bearish seasonal trend, September may present both risks and opportunities, especially with institutional buyers waiting to enter the market.

The U.S. Commerce Department has begun publishing official economic statistics directly to a public blockchain, describing the move as a new effort to improve transparency and data security.

Bitcoin’s “red month” is approaching. As another September approaches, is a price drop inevitable? Let’s look at some of the reasons why the ninth month of the year has historically performed poorly for Bitcoin.

September has been a challenging month for Bitcoin since 2013, with prices declining in eight of the past 11 years. This is likely due to retail investors often taking profits after the summer rally, or even selling cryptocurrencies to cover fall expenses like tuition and tax planning.

Bitcoin's "Red September" could also be a self-fulfilling prophecy. As traders anticipate a price drop, they adopt more defensive and conservative strategies, pushing the market further downward. However, objectively speaking, most September pullbacks are relatively mild.

It's worth noting that September typically forms a "local bottom," after which Bitcoin often rebounds strongly into a "Golden October." Historically, the fourth quarter often sees market recoveries, or even significant increases. For example, in October 2020, Bitcoin soared from approximately $10,800 at the beginning of the month to over $13,800 by the end of the month, a gain of over 27%.

No matter how you look at it, the market in August 2025 was dramatic. On August 14, Bitcoin hit an all-time high of $124,533, but just two weeks later it plummeted 11% to a low of around $110,000.

The decline caused nearly $200 billion in market value to evaporate, and the direct cause of the decline was that a previously long-dormant whale sold about 24,000 BTC, pushing the spot price below $109,000 and triggering the largest liquidation chain reaction of the year.

Nearly $900 million in derivatives positions were forcibly liquidated during this period, 90% of which were bullish long positions. Bitcoin alone saw $150 million in liquidations, while Ethereum saw $320 million in liquidations. In comparison, Ethereum has shown relative resilience: even after an 8% drop, it remained above its 100-day moving average.

The recent market weakness isn’t just a matter of technicals or sentiment. Order books in both spot and derivatives markets remain thin, so any large-scale sell-off, such as the whale sell-off mentioned above, is enough to amplify price fluctuations.

At the same time, on-chain data at the end of August showed that market activity was sluggish and capital inflows decreased, further weakening buying support.

Macroeconomic uncertainty also continues to pose a headwind. As the market focuses on the US Federal Reserve's policy moves in September, traders are assessing the risk of market volatility and hoping that positive macroeconomic signals (such as an interest rate cut) will rekindle market optimism.

Cryptocurrency trader Cas Abbé proposed three possible scenarios for Bitcoin's market as September approaches.

"Ranging and Correcting" scenario (40% probability): Bitcoin is expected to trade sideways between $110,000 and $120,000 for most of September. During this period, the market will gradually reduce excess leverage and institutional investors will gradually enter the market and increase their holdings. This consolidation will lay a healthier foundation for a potential fourth-quarter rally.
A "double dip" scenario (35% probability): If Bitcoin falls below $110,000, it could trigger a new wave of liquidations, pushing the price down to the high $100,000s and wiping out remaining leveraged positions. Historically, such pullbacks have often preceded a "strong bottom."
“Quick Recovery” Scenario (25% probability): If institutional investors buy heavily, Bitcoin may quickly recover the $117,000-118,000 range, igniting bullish sentiment in advance.

Abbé suggested that traders should pay close attention to multiple chain and macro signals throughout September, especially the activity in the options market before the expiration of options on September 27, which may provide important clues for judging market holdings and sentiment.

Whether Bitcoin's "red month" of September this year can turn into a "green month" remains to be seen. However, given the current thin liquidity, increased volatility, and institutional buyers waiting for an opportunity to enter the market, September this year may hold both risks and opportunities.