If any historical data remains, the price of Bitcoin (BTC) could decline further in September, which was the worst performing month on record for the crypto asset since 2013.

Available data shows that the flagship digital asset only saw its value increase in two Septembers between 2013 and 2021, i.e. in 2015 and 2016. Out of these two, BTC recorded an average drop of 6% during of the month.

Monthly Bitcoin Returns
Monthly Bitcoin Returns

Meanwhile, the September effect is not unique to BTC alone. The S&P 500 has also seen declines for most of September since 1928.

Between 1928 and today, the S&P 500 has recorded an average decline of 1.1% in September. experts Argue that the general decline in the market in September is due to the behavior of investors.

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

According to Elena Dure, most investors usually exit their market positions in September to lock in their tax gains or even losses at the end of the year.

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

Given that the price of BTC has mostly mirrored that of the performance of the S&P since the pandemic, it won’t be entirely surprising if there is another dip in the price of BTC this month.

Will this month of September reverse the trend?

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

After weeks of trading around $20,000 and many analysts suggesting that the price might have bottomed out, BTC’s value fell below $20,000. Over the past 24 hours, the value of the cryptocurrency has declined by 1.4% and 2.2% on seven-day metrics.

This year alone, the price of Bitcoin has fallen by around 59%.

Breakdown of Bitcoin Negative Months
Source: Glassnode

The chances of September 2022 being an outlier month like 2015 and 2016 are also minimal, given that the conditions responsible for the decline in asset values ​​persist.

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

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

Apart from that, the US Department of Labor revealed that unemployment had risen to 3.7% – the highest since February – another indication of the difficulties of the US economy.

Posted in: Bitcoin, Analysis