What is “Red September”? The Bitcoin curse that also worries Wall Street

Investors in Bitcoin have lost money in eight of the last 13 Septembers. The S&P 500 has posted an average loss in the month of September since 1945, and researchers at Yardeni have traced the pattern back to 1928.

Bitcoin did not invent this curse, but the digital asset has joined it anyway.

Crypto traders call it “Red September”, a kind of cyclical market bogeyman that resurfaces every year around this time. But it is not superstition. It is a data pattern persistent enough that neither a fifteen-year-old asset nor a century-old stock index can shake it off.

But why?

The maths behind the curse

Since 2013, Bitcoin has closed September lower in eight of 13 full years, a 38.5% hit rate, according to monthly return data tracked by CoinGlass. The average return is negative 2.97%, the median is negative 2.44%, and both figures matter here: a negative median means even a “normal” September results in losses, not just a handful of catastrophic years dragging the average down.

Only June comes close, with a smaller average loss of 1.59% over the same period. Every other month of the calendar is positive on average. October, the standout best month, has posted an average return of 19.92% with a median of 14.71%, the “Uptober” reputation that crypto Twitter celebrates whenever it rolls around.

August deserves a footnote here, because the number is misleading. Its average return is a respectable positive 2.82%, but its median is negative 6.99%. Translation: most Augusts result in losses, and it is only the outlier years that push the average into positive territory.

It is not just crypto

Wall Street's version is older and better documented. The S&P 500 has posted an average decline of roughly 0.6% in September since 1945, according to Chase's own market research, and it is the only month with a negative long-term average. Going back to 1928, the number worsens, reaching an average loss of 1.1% to 1.2%.

Nobody agrees on why. The leading theories are: mutual funds close their fiscal year on 31 October and offload underperforming assets in September to harvest tax losses; institutional desks return from summer holidays and execute delayed deleveraging all at once; and the Fed's mid-month meeting tends to fall right in the middle of the turbulence.

None of those explanations applies to Bitcoin, which has no fiscal year and no summer holidays, but is still a financial investment.

This year brings an extra layer. 2026 is a US mid-term election year, and over the last 10 mid-term cycles since 1986, the average US stock market low has occurred on 2 September, with drops averaging nearly 17% from the prior peak before markets recovered. Bitcoin currently trades more like a high-beta tech stock than a hedge, so that correlation cuts both ways.

What happened last September

Last year's Red September followed the script, then flipped it. Bitcoin opened the month trading around US$108,000, with its RSI signalling oversold conditions near 38, and DYOR CEO Ben Kurland told Decrypt that the idea of Red September is “more myth than maths”.

The maths won the early rounds. By mid-month, a brutal week had wiped out roughly US$162 billion from total crypto market value and pushed Bitcoin down to around US$112,000, briefly touching an intraday low near US$111,986. Myriad, the prediction market, had traders pricing in nearly 60% odds of another red day at the bottom.

Bitcoin recovered anyway. ETF inflows played a role. CryptoQuant flagged that long-term holders were rotating coins into ETFs as a bullish signal, and Bitcoin rallied above US$114,000 to close the month up 5.16%, the third consecutive positive September on record.

Then October spoiled the party

The redemption arc lasted six days. Bitcoin hit a new all-time high above US$126,000 on 6 October, and the “Uptober” trade looked bulletproof again.

It was not. On 10 October, President Donald Trump threatened 100% tariffs on Chinese imports, and crypto became the only market open to react. Within 24 hours, US$19 billion in margin positions were wiped out, 1.6 million traders were liquidated, and market maker Wintermute told Decrypt it stopped trading altogether because the move broke its own internal risk rules.

Bitcoin fell from over US$121,000 to briefly below US$102,000 that day, dragging altcoins even lower. Some layer-2 tokens lost 70% within hours. October closed down 3.69%, only the third negative October since 2013, and the damage kept piling up: November ended down 17.67%, Bitcoin's worst November since 2018, on its way to a 21-month low near US$59,300 by last June. Crypto traders came to call that period the crypto winter.

So last year was an outlier. We got an “Uptember” and a Red October, which is not how the market universe usually behaves.

Bitcoin's setup this time

Bitcoin was trading around US$77,500 at the start of September, after closing an August that gained nearly 25%, its best August since 2021. That rally stalled just below resistance between US$81,455 and US$82,538, with support in the US$73,670 to US$75,157 zone below.

The macroeconomic backdrop has shifted sharply since spring. Fed Chair Kevin Warsh used his first Jackson Hole speech to signal that the PCE price index is running at 3.7% annually and accelerating on a six-month basis, and the CME's FedWatch tool now puts the odds of a September rate hike at 68.2%. The 30-year Treasury yield hit 5.28% in late August, a level last seen before the 2008 financial crisis.

Gold has risen alongside Bitcoin, which says something about what is actually driving this: not so much risk appetite, but a growing debasement trade, with investors hedging against a Fed that may be forced to keep printing while inflation refuses to cooperate. The US Securities and Exchange Commission's (SEC) proposed rule on Crypto Assets, published on 18 August, adds a rare regulatory boost to an otherwise jittery backdrop.

The next key date is 15-16 September, when the Fed will decide whether to raise rates for the first time since its 2022-2023 tightening cycle, a period that drove Bitcoin down roughly 65%, to a low of US$15,500 in November 2022.

* Translated and edited with permission from Decrypt.

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