Bitcoin's red month; why September still shapes the crypto cycle

Bitcoin’s red month is almost here, and as we approach yet another September, is it inevitable that prices will dwindle? Let’s take a look at some of the reasons the ninth month of the year is historically bad for Bitcoin.

Why September is historically Bitcoin’s red month

Since 2013, September has proven to be a challenging month for Bitcoin, with losses in eight of the last 11 years. That could be because retail investors typically take profits after summer rallies or even crypto to cover their fall expenses, like tuition fees and tax planning.

Bitcoin’s red month may also be something of a self-fulfilling prophecy as traders expect red candles and act more defensively, pulling the market down further. Perspective here is important, as most September pullbacks have been modest.

The month typically marks a local bottom, after which Bitcoin often rebounds strongly into ‘Uptober’ as Q4 historically brings recovery and, in even massive rallies. In October 2020, for example, Bitcoin surged from around $10,800 at the start of the month to over $13,800 by the end, marking a gain of more than 27%.

August recap: all-time highs and whale sightings

August 2025 was dramatic by any measure. Bitcoin surged to an all-time high of $124,533 on August 14, only to tumble 11% to lows hovering around $110,000 just two weeks later.

Nearly $200 billion in market value evaporated, with a single event triggering the drop: a previously dormant whale that sold ~24,000 BTC, pushing the spot price below $109,000 and sparking the largest liquidation cascade of the year.

Almost $900 million in derivative positions were wiped out, 90% being bullish longs, with $150 million in BTC and $320M in ETH liquidated. Ethereum showed relative strength, remaining above its 100-day moving average even with an 8% decline.

The recent weakness wasn’t just about technicals or sentiment. Spot and derivatives market order books remained thin, so any major sell (like the whale dump) was enough to amplify price volatility.

Meanwhile, on-chain data in late August showed tepid activity and reduced inflows, further weakening bid support.

Macroeconomic uncertainty also continues to be a headwind. With the U.S. Federal Reserve’s September policy moves in focus, traders are pricing in both risk of erratic moves and potential for renewed optimism if macro signals, like a rate cut, turn favorable.

Preparing for September: scenarios and signals

Crypto trader Cas Abbé outlined three possible scenarios for Bitcoin as September approaches. In his primary “Range & Repair” scenario (40% probability), Bitcoin is expected to trade sideways between $110K and $120K for most of the month, as excess leverage is reduced and institutional investors gradually step in to accumulate. Such a consolidation would create a healthier base for a potential Q4 rally.

In the “Second Flush” case (35% probability), if Bitcoin drops below $110K, a further wave of liquidations could ensue, driving the price into the high $100Ks and erasing leftover leveraged positions. Historically, these kinds of corrections often precede a strong bottom.

Conversely, the “Quick Reclaim” scenario (25% probability) envisions institutions buying aggressively, enabling BTC to rapidly reclaim the $117K–$118K range and triggering an earlier return of bullish sentiment.

Throughout September, Abbé suggests traders closely monitor several on-chain and macro signals; notably, options market activity leading up to the September 27 expiry could offer valuable insights into positioning and sentiment.

Whether Bitcoin’s red month will turn green this year remains to be seen, but with thin liquidity, heightened volatility, and institutional buyers waiting in the wings, September may offer both risks and opportunities this year.