Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Bitcoin is positioned for a potential rebound towards $124,500 in September, defying the month’s historical reputation as one of its weakest for price performance. Despite closing August in the red, marking its first down-month since April, market analysts are pointing to a confluence of technical indicators and macroeconomic factors that suggest a bullish reversal is imminent.
Historical Context: The “September Effect”
Historically, September has been a challenging month for Bitcoin, often referred to as the “September Effect,” when traders tend to secure profits or rebalance portfolios. Since 2013, Bitcoin has closed in the red for eight of the past twelve Septembers, with average monthly returns slipping by approximately −3.80%.
This seasonal drag is not unique to Bitcoin; the S&P 500 index has also seen average September returns of around -1.20% since 1928, indicating a broader market trend. However, a notable pattern suggests that every “green” September for Bitcoin has historically followed a “bruising” August, hinting at sellers front-running the expected dip.
Technical Rebound Projections
Contrary to the historical trend, some analysts believe a “September dump is not coming” this year. Analyst Rekt Fencer draws parallels to Bitcoin’s performance in 2017, noting a near-mirror image in chart overlays between the two cycles.
Both periods show Bitcoin slipping sharply in late August, finding support at a key zone, and then reversing higher. The current support zone, between $105,000 and $110,000, previously acted as resistance earlier in the year but has now flipped into a bullish support structure, according to technical analysis.
Another significant upside signal is the “hidden bullish divergence.” Despite Bitcoin’s recent price drop, its Relative Strength Index (RSI), a key momentum indicator, has not fallen as sharply. This often suggests that the market’s underlying weakness is not as severe as the price chart implies, indicating quiet accumulation by buyers.
Analyst ZYN suggests that these technical patterns could propel Bitcoin toward a fresh all-time high above $124,500 within the next four to six weeks, justifying a potential rally throughout September.
Macroeconomic Tailwinds
A weakening US dollar could further bolster Bitcoin’s prospects in September. Currency traders are increasingly bearish on the dollar, anticipating a slowing US economy and expected interest rate cuts from the Federal Reserve.
This sentiment is compounded by Donald Trump’s past criticisms of the Fed’s policies. As of Sunday, the 52-week correlation between Bitcoin and the US Dollar Index (DXY) had dropped to −0.25, its weakest level in two years. This shift significantly improves Bitcoin’s odds of climbing if the dollar’s slump continues.
Analyst Ash Crypto reinforced this outlook, stating last week that “The Fed will start the money printers in Q4 of this year.” Ash Crypto added that “Two rate cuts mean trillions will flow into the crypto market,” predicting an imminent “parabolic phase where Altcoins will explode 10x -50x.”
Despite historical headwinds, a combination of strong technical patterns and a weakening US dollar suggests that Bitcoin may be poised for a significant upward movement in September. Analysts are closely watching key support levels and macroeconomic shifts that could drive the cryptocurrency to new highs.
