September is historically the worst month for BTC since 2013

If historical data is still anything, the price of Bitcoin (BTC) could drop further in September, which was the worst-performing month on record for the crypto asset since 2013.

Available data shows that flagship digital activity only saw its value increase in two September between 2013 and 2021, i.e. 2015 and 2016. Outside of these two, BTC recorded an average decline of 6 % in the month.

Monthly returns of bitcoin
Bitcoin monthly returns

Meanwhile, the September effect is not unique to BTC alone. The S&P 500 has also had dips in most of September since 1928.

Between 1928 and today, the S&P 500 recorded an average decline of 1.1% in September. Experts say the overall market decline in September is due to investor behavior.

calendar month returns s & p500 index 1928-today
Source: Jeroen Blokland’s blog

According to Elena Dure, most investors usually exit their market positions in September to lock in their gains or even tax losses as the year draws to a close.

There is also a higher asset clearance rate as schools resume in September and the need for cash arises to pay for school fees.

Given that BTC’s price has mostly mirrored that of S&P’s performance since the pandemic, it won’t be entirely surprising if a further drop in BTC price occurs this month.

Will this September go against the trend?

While many investors will want the price of Bitcoin to return to previous highs, the possibility of a red September is already manifesting after the asset lost all of its gains in the last few months in the last days of August.

After weeks of trading around the $ 20,000 range and many analysts suggesting that the price may have hit a low, BTC’s value has dropped below $ 20,000. Over the past 24 hours, the value of the cryptocurrency has dropped 1.4% and 2.2% on seven-day metrics.

In this year alone, the price of Bitcoin has dropped by around 59%.

The breakdown of Bitcoin's negative months
Source: Glassnode

The chances of September 2022 being an anomalous month like 2015 and 2016 are also minimal, as the conditions responsible for the decline in asset value persist.

Federal Reserve Chairman Jerome Powell warned that the US economy will face more “pain” as authorities struggle to control rising inflation.

The statement led several experts to predict that the FOMC could raise the interest rate further in September.

Aside from that, the US Department of Labor revealed that unemployment rose to 3.7% – the highest since February – another indication of the troubled US economy.

Posted in: Bitcoin, Analysis

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