Bitcoin's "Red Month": Why September Still Dominates the Cryptocurrency Cycle

Objectively speaking, most of the September pullbacks have actually been relatively mild.

Source: cryptoslate

Translation: Blockchain Knight

The U.S. Department of Commerce has begun publishing official economic statistics directly onto public blockchains, calling this a new initiative to enhance transparency and data security.

Bitcoin's "red month" is approaching. As another September draws near, is a price drop inevitable? Let’s take a look at some historical reasons why the ninth month of the year has often been unfavorable for Bitcoin.

Since 2013, September has consistently been a challenging month for Bitcoin, with prices falling in 8 out of the past 11 years. This may be because retail investors typically take profits after summer rallies or even sell off cryptocurrencies to cover autumn expenses, such as tuition and tax planning.

Bitcoin’s “red September” may also be a “self-fulfilling prophecy.” As traders widely expect prices to fall, they tend to adopt more conservative, defensive strategies, which in turn pushes the market further downward. However, objectively speaking, most September corrections have actually been relatively mild.

It is worth noting that September often forms a “local bottom,” after which Bitcoin tends to rebound strongly into a “golden October,” as historical data shows that the fourth quarter is often accompanied by a market recovery or even a significant rally. For example, in October 2020, Bitcoin surged from around $10,800 at the start of the month to over $13,800 by the end, a gain of more than 27%.

From any perspective, the market in August 2025 can be described as dramatic. On August 14, Bitcoin hit a record high of $124,533, but just two weeks later, it plunged 11% to a low of around $110,000.

This drop wiped out nearly $200 billions in market capitalization, and the direct trigger was a long-dormant whale selling about 24,000 BTC, pushing the spot price below $109,000 and causing the largest liquidation cascade of the year.

During this liquidation, nearly $900 millions in derivatives positions were forcibly closed, with 90% being bullish long positions. Bitcoin alone saw $150 millions in positions liquidated, while Ethereum saw $320 millions in positions liquidated. In comparison, Ethereum showed relative resilience: even with an 8% drop, it remained above its 100-day moving average.

The recent market weakness is not just a matter of technicals or sentiment. Order books in both spot and derivatives markets have remained “thin,” so any large-scale sell-off (such as the aforementioned whale sale) is enough to amplify price volatility.

Meanwhile, on-chain data at the end of August shows low market activity and reduced capital inflows, further weakening buying support.

Macroeconomic uncertainty also continues to be a headwind. As the market focuses on the U.S. Federal Reserve’s policy moves in September, traders are assessing volatility risks and hoping that if macro signals turn positive (such as a rate cut), optimism in the market can be reignited.

Cryptocurrency trader Cas Abbé has proposed three possible scenarios for Bitcoin as September approaches.

• “Range-bound consolidation and recovery” scenario (40% probability): For most of September, Bitcoin is expected to trade sideways in the $110,000 to $120,000 range. During this phase, excess leverage will gradually be reduced, and institutional investors will gradually enter and increase their holdings. This consolidation will lay a healthier foundation for a potential fourth-quarter rally.
• “Second drop” scenario (35% probability): If Bitcoin falls below $110,000, it could trigger a new wave of liquidations, pushing the price down to the high $100,000 range and clearing out remaining leveraged positions. Historically, such corrections often precede the emergence of a “strong bottom.”
• “Rapid recovery” scenario (25% probability): If institutional investors buy aggressively, Bitcoin could quickly recover to the $117,000–$118,000 range, igniting bullish sentiment ahead of schedule.

Abbé suggests that throughout September, traders should closely monitor multiple on-chain and macro signals, especially the activity in the options market before the September 27 options expiry, as this could provide important clues for assessing market positioning and sentiment.

Whether Bitcoin’s “red month” in September can turn into a “green month” this year remains to be seen. But given the current thin liquidity, heightened volatility, and institutional buyers waiting to enter, this September may contain both risks and hidden opportunities.