'Red September' Is Coming - Here Are The Expectations From The Bitcoin Market

Bitcoin has fallen an average of 3.77% every September since 2013. As this month approaches, traders are preparing for the next seasonal sell-off. Bitcoin is trading sideways as August comes to a close, and cryptocurrency traders are doing what they always do at this time of year: Preparing for the Pain. The phenomenon known as "Red September", or "September Effect", has haunted the market for nearly a century. The S&P 500 has recorded an average negative return in September since 1928, making this the only month to consistently have negative returns for this index. Bitcoin's performance is even worse—this cryptocurrency has fallen an average of 3.77% every September since 2013, and has crashed eight times according to data from Coinglass. Yuri Berg, an advisor at the Swiss-based cryptocurrency liquidity provider FinchTrade, stated: "This model is predictable: negative chatter on social media spikes around August 25, followed by an increase in Bitcoin deposits to exchanges within 48-72 hours." "Red September has shifted from an abnormal market phenomenon to a monthly psychological test. We are witnessing the entire market convincing itself to sell off based on history rather than current fundamentals."

The mechanism behind Red September stems from market behaviors that are structurally convergent each fall. Mutual funds end their financial year in September, triggering tax loss harvesting and portfolio rebalancing, flooding the market with sell orders. As summer vacation ends, traders return to their desks to reassess positions after months of low liquidity. Bond issuance activity surges after Labor Day, pulling capital from stocks and risk assets as institutions shift to fixed-income bonds. The FOMC held its September meeting, creating instability that froze buying activity until policy direction is clarified. In the cryptocurrency space, these pressures are compounded: Bitcoin trades 24/7, meaning there is no circuit breaker when selling pressure accelerates, and a smaller market capitalization makes the coin more susceptible to moves from whales looking to transfer profits to altcoins. The sell-off began in traditional markets and spread to cryptocurrencies within a few days. As the S&P 500 fell, institutional investors would sell off Bitcoin first to meet margin calls or reduce portfolio risk. The futures market amplifies losses through successive liquidations—a 5% spot price movement can cause a 20% drop in the derivatives market. Social sentiment indicators turned negative at the end of August, and traders sold off in advance to avoid anticipated losses. Options brokers hedge risks by selling Bitcoin spot as volatility increases, adding mechanical pressure regardless of fundamental factors. And just like any other market, some people believe that this becomes a model stemming from pure rational expectations, which is just another way of talking about self-fulfilling prophecy. The numbers reinforce Berg's observation. The Crypto Fear and Greed Index has fallen from 74/100 to 52, although the global stock market shows a more optimistic outlook with 64 points. This index is at a neutral level but still remains in the "Greed" zone.

But this September brings unusual headwinds. The Federal Reserve has made positive statements, with the market anticipating another rate cut for the meeting on September 18. Core inflation remains at 3.1%, while two ongoing wars are disrupting global supply chains. These conditions create what Daniel Keller, CEO of InFlux Technologies, sees as a perfect storm. "We have two historical battlefields, one in Europe and one in the Middle East, disrupting important supply chains," Keller told Decrypt. "Additionally, the United States has initiated a global trade war against most of its major allies. The current global geopolitical situation could very well push BTC into a sharp fall in September 2025." Technical indicators are beginning to paint a scary picture for traders. Bitcoin has broken below the important support level of $110,000, which has held the upward momentum since May. The 50-day moving average is currently at $114,000 and is acting as a resistance level, with the 200-day EMA providing support near the price level of $103,000.

Technical traders may be viewing the $105,000 level as a resistance point. On Myriad, a prediction market developed by Dastan, the parent company of Decrypt, traders are currently betting that the likelihood of Bitcoin falling to $105,000 is nearly 75%. If the price breaks below $105,000, the target will be below $100,000, lower than the 200-day moving average. If the price maintains above $110,000 in the first two weeks of September, then the seasonal curse may finally be broken. The relative strength index (RSI) is at 38, in the oversold zone, indicating that at least some Bitcoin investors are trying to sell their coins as quickly as possible. The trading volume is still 30% lower than the average for July, a typical level for late summer trading, but it could cause issues if volatility spikes. But even when it seems that traders are preparing for history to repeat itself, some still believe that the fundamental basis of Bitcoin is stronger than ever and that will be enough for the king of cryptocurrencies to get through this difficult month—or at least not collapse as it has in the past. "The idea of 'Red September' is more legendary than mathematical," Ben Kurland, CEO of the cryptocurrency research platform DYOR, shared. "Historically, September tends to appear weak due to portfolio rebalancing, weakened retail momentum, and macroeconomic fluctuations, but those patterns were very important when Bitcoin was still a small and thin market." Kurland points out that new liquidity is the real driving force today. "Inflation is not falling at all, but is proving difficult as core indicators continue to rise gradually. Yet even with those obstacles, the Fed is still under pressure to ease policy as growth slows, and investment flows from institutions are stronger than ever." Traditional warning signs have appeared. The Federal Open Market Committee (FOMC) will meet on September 17-18, with the market divided on whether officials will keep rates unchanged or cut them. Keller advises to closely monitor the fear and greed indices. "Traders in the upcoming weeks should keep an eye on the fear and greed indices to gauge the overall market sentiment and whether to hold in case of a price surge or to sell off as 'Red September' approaches," he said. The seasonal pattern may be weakening as cryptocurrencies mature. Bitcoin's losses in September have slightly decreased from an average negative 6% in the 2010s to a negative 2.55% over the past five years. The investment of institutions through ETFs and corporate bonds has contributed to increased stability. In fact, over the past two years, Bitcoin has recorded positive growth in September. Berg sees this entire phenomenon as a form of self-reinforcing psychology. "After many years of sell-offs in September, the cryptocurrency community has conditioned itself to anticipate weakness. This creates a cycle in which the fear of a decline is precisely the decline," he said. If the outlook seems bleak, don't worry: After the red September comes October— or "Uptober"— historically, this is Bitcoin's best month of the year.