Bitcoin's 'Red September' Curse: Historical Data and Market Patterns

Article by Jose Antonio Lanz

Compile: Blockchain in Plain Language

Bitcoin investors have lost money in 8 out of the past 13 Septembers. Since 1945, September has on average delivered negative returns for the S&P 500, with Yardeni Research extending this trend back to 1928.

Bitcoin was not the originator of this curse, but this digital asset was also not spared.

Crypto traders refer to it as "Red September," a recurring seasonal market nightmare that resurfaces every year at this time. But this is not superstition—it’s a persistent data pattern that neither a 15-year-old asset nor a century-old stock index can escape.

What exactly is the reason?

According to monthly return data tracked by CoinGlass, out of the 13 complete years since 2013, Bitcoin experienced a decline in September on eight occasions, yielding a win rate of only 38.5%. The average return was -2.97%, with a median of -2.44%. Both figures are significant: the negative median indicates that even in a "typical" September, investors lose money—not merely due to a few sharp crashes dragging down the average.

The only other month with performance approaching this decline was June, with an average loss of a relatively modest 1.59%. All other calendar months recorded positive average returns. In contrast, October is the most profitable month of the year, with an average return of 19.92% and a median of 14.71%—the very reason the crypto community celebrates the annual “Uptober” rally.

August’s data warrants separate attention, as it is misleading on the surface: although the average return for August appears high at 2.82%, the median return is -6.99%. In other words, most Augusts resulted in losses, with only a few extreme outlier years pulling the average into positive territory.

Wall Street has documented this phenomenon for a longer and more detailed period. J.P. Morgan’s proprietary market research shows that since 1945, the S&P 500 has averaged a decline of approximately 0.6% in September, making it the only month with a negative long-term average return. Extending the timeframe back to 1928, the data is even worse, with an average decline of nearly 1.1% to 1.2%.

There is much debate about the causes of the market downturn: mainstream views include that mutual funds typically end their fiscal year on October 31, leading them to sell off losing positions en masse in September for tax-loss harvesting; institutional traders return from summer vacations and execute previously deferred hedging and position-reduction strategies; additionally, the Federal Reserve’s mid-month interest rate meetings often coincide with periods of peak volatility.

None of these theories fully explain Bitcoin—Bitcoin has no fiscal year or summer break, yet it remains a financial investment asset.

This year adds another unique variable: 2026 is a U.S. midterm election year. Over the past 10 midterm election cycles since 1986, the S&P 500’s average annual low has occurred on September 2, with an average drawdown of nearly 17% from the prior peak before the market stabilizes and rebounds. Given that Bitcoin’s current trading behavior more closely resembles high-beta technology stocks than a pure safe-haven asset, this correlation operates in both directions.

Last year (2025), "Red September" started as expected, then took a dramatic turn. Bitcoin opened the month near $108,000, with the RSI indicator falling into the oversold zone around 38. At the time, Ben Kurland, CEO of DYOR, even told Decrypt that "Red September" was more of a "myth than a mathematical rule."

In the early stages of the market movement, historical patterns still held. By mid-month, a brutal single-week rally erased nearly $162 billion from the total market capitalization of the crypto market, with Bitcoin falling toward $112,000 and briefly touching a low of $111,986 during the session. On the derivatives markets at the time, traders bet on the probability of another bearish candle forming at the bottom approached 60%.

However, Bitcoin subsequently mounted a strong rebound, with ETF fund inflows playing a key role. CryptoQuant viewed the transfer of tokens by long-term holders into ETFs as a bullish signal, followed by a powerful Bitcoin rally that broke above $114,000, closing the month up 5.16%—marking the third consecutive green September on record.

The rebound lasted only six days. On October 6, Bitcoin reached a new all-time high above $126,000, making the "Uptober" rally seem firmly established.

Yet the situation took a sharp turn for the worse. On October 10, U.S. President Donald Trump threatened to impose 100% tariffs on Chinese imported goods, and the crypto market became the only venue actively trading and reacting. Within 24 hours, $19 billion in leveraged positions were liquidated, and 1.6 million traders were wiped out. Market maker Wintermute even stated it had fully paused trading, as the extreme volatility directly breached its internal risk controls.

Bitcoin plunged from above $121,000 to below $102,000 in a single day, with altcoins suffering even steeper losses; some Layer-2 tokens lost up to 70% of their market cap within hours. October ended down 3.69%, becoming only the third October since 2013 to close in negative territory. The downturn continued to worsen: November fell a staggering 17.67%, marking the worst November since 2018, and prices dropped further to a 21-month low near $59,300 in June. Crypto traders have labeled this period the Crypto Winter.

Therefore, last year was an unusual year: the market experienced "Uptember" and "Red October," completely contrary to historical norms.

As we enter September 2026, Bitcoin is trading around $77,500. Prior to this, Bitcoin concluded August with a nearly 25% gain—the strongest August performance since 2021. The current rally has encountered resistance below the range of $81,455 to $82,538, with support located in the range of $73,670 to $75,157.

Since this spring, the macroeconomic environment has undergone a dramatic shift. At the inaugural Jackson Hole symposium, Federal Reserve Chair Kevin Warsh warned that the annual PCE price index is running at 3.7% and has accelerated over the past six months; the CME FedWatch tool shows the probability of a rate hike in September has now reached 68.2%. Meanwhile, the 30-year U.S. Treasury yield touched 5.28% at the end of August, reaching its highest level since the 2008 financial crisis.

Gold has recently risen in tandem with Bitcoin, revealing the true driver behind current market movements: not merely increased risk appetite, but an escalating "currency devaluation hedge trade"—investors betting that, amid persistent inflation, the Fed will ultimately be forced to continue printing money. Additionally, the SEC’s August 18 release of the draft Regulation Crypto Assets provided a rare regulatory tailwind for the currently tense market sentiment.

The next major test will occur on September 15–16, when the Federal Reserve decides whether to initiate its first interest rate hike since the 2022–2023 tightening cycle—the very cycle that triggered a roughly 65% plunge in Bitcoin, pushing it to a low of $15,500 in November 2022.