- Bitcoins September Struggles, the occurrence where asset values decrease has adversely affected the US stocks and BTC in particular.
- In fact, the S&P 500 has negative returns in September 55 percent of the times since 1929, meaning it is the worst month for any stock investor.
- October commonly known as uptober has been the month with the highest gains in Bitcoin where on average the digital asset rises by 22% every month of October since 2013.
- Certain analysts do not think the September Effect will not be so dramatic for the crypto market in 2024 since institutional investors are involved and expected more Fed cuts.
The September Effect:
These are some of the common Dilemmas that Follow:
As for any correlation, September has proven to be a rather challenging month for US stocks in the past and Bitcoin was no exception in that regard. This event is commonly referred to as the “September Effect” where there is usually a large decline in asset prices. According to the historical trends of stock market at S&P 500, September showed negative returns 55% of the time since 1929 and primarily regarded as the worst month for any stock investor.
But what about Bitcoin? Similar to being a relatively newly recognized asset, weakness in September marks Bitcoin price behaviour. According to figures obtained from CoinGlass, Bitcoin has fallen eight times in September since the year 2013 and they are regarded as the worst-performing month in the history of cryptocurrency.
Bitcoin’s Performance in September: The Reasons
The causes for the Bitcoin drops in September are not very clear. Conventional financial markets have been affected by factors like traders’ vacation periodicity and end of the fiscal year. Some of these factors may also affect the performance of Bitcoin due to the fact that most institutional investors now consider Bitcoin to be in the category of a diversification tool. But directionality in the short-run is an entirely different story influenced by liquidity trends, macro conditions together with sentiment.
As a trader at Wintermute, Jake Ostrovskis argues that the September Effect cannot be the sole determinant of Bitcoin’s movement since the available history is small. However, experienced investors rely more on general indicators such as liquidity and the actions of the Federal Reserve.
UPTOBER: The Beacon of Hope?
Even though September has never been a good month for the stock market, there is hope in the dark: October. Also called uptober, this is the month that has been historically records high gains for Bitcoin. On average, Bitcoin rises by 22% every October since 2013, which provides an opportunity for the cryptocurrency to recover from its misfortunes in September.
The term ‘Uptober’ emerged during the bull market of 2021 in which Bitcoin not only reclaimed its losses in September but also posted astronomical gains in the subsequent months.
BTC’s Past Performance of Rebound After September
Looking at the previous Bitcoin performance, the cryptocurrency usually performs poorly in September but recovers shortly after. In the historical analysis, Bitcoin has had a 5% average loss in September and with a recovery in October and November with an average of 46% increase in November. Those who use September as the month for investing in stocks particularly those targeting long-term earnings terms have a different attitude on the month calling it a mere blip towards better months.
Will 2024 Be Different?
The crypto market has evolved over the course of the years and the September Effect might not impact too much the market since institutional investors are entering the crypto space. This is why some analysts believe Fundamentals rather than technicals: a growing acceptance of Bitcoin as an asset and anticipation of further Fed cuts this year.
Read Also: The Shocking Truth: September, Bitcoin’s Worst Month
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