Bitcoin (BTC) and the "September Effect" - A Look at the Month's Historically Negative Returns

The stock market is buzzing with anticipation for the “September Effect,” a phenomenon where the month has historically brought negative returns for investors. Interestingly, Bitcoin (BTC) has also experienced a similar effect, with September being the worst month for returns, typically punishing cryptocurrency bulls.

To delve deeper into this scenario and gain data-guided insights into cryptocurrencies, Finbold retrieved data from CoinGlass on August 31.

According to the data, Bitcoin has had only three green monthly returns in September out of eleven months. In 2015, BTC closed the month with 2.35% gains, followed by a 6.04% price surge in 2016. Notably, last year marked the third “green September” for the leading cryptocurrency, with a 3.91% gain.

On the other hand, the worst “Septembers” for Bitcoin were in 2014 and 2019, with two-digit losses of over 19% and 13%, respectively.

Overall, the “September Effect” seems to be a real phenomenon for Bitcoin, which could lead to losses for investors. However, it is worth noting that there were years with a positive performance in this seemingly cursed month. Hence, the market could surprise bearish traders who are betting on historical patterns.

Bitcoin (BTC) price analysis

At the time of writing, BTC is trading at $59,110, up 40.05% year-to-date but with a significant six-month downtrend. Since the all-time high in March, the Bitcoin price has formed lower highs and lower lows, indicating weak momentum.

On-chain analyst Ali Martinez has highlighted a crucial level of $66,000 that Bitcoin needs to break soon. According to Martinez, if the price continues to trade below this level in the upcoming weeks, it could indicate a prolonged bear market.

Meanwhile, other analysts maintain a bearish stance for the short-term while remaining bullish for the mid and long-term. Specifically, Ben Walther believes that Bitcoin’s chart pattern suggests “more down,” and Alan Santana anticipates BTC’s “biggest crash” before a rally.

Considering the above, it is challenging to predict whether Bitcoin will experience another “September Effect” this year, leading to losses. Investors should build their positions cautiously, following their strategies and keeping a close eye on the market.