Bitcoin May Avoid a Big September Drop and Could Aim for New Highs Soon
- A weaker dollar and Fed rate cuts can be significant tailwinds for BTC price.
Bitcoin (BTC) is poised to end August in the red, marking its first down month since April, which has sparked concerns that the decline might worsen as September approaches.
Historically, Bitcoin tends to experience a downturn in September.
Since 2013, Bitcoin has finished in the negative for eight out of the past twelve Septembers, with average returns decreasing about -3.80%.
Market experts refer to this phenomenon as the “September Effect,” a month when traders typically lock in profits following summer rallies or adjust their portfolios in preparation for Q4. For instance, since 1928, the average returns of the S&P 500 index in September have been around -1.20%.
Often moving in tandem with broader risk assets, Bitcoin can be impacted by this seasonal pressure.
However, every green September for Bitcoin since 2013 has occurred only after a tough August, indicating that sellers may be pre-emptively closing positions.
Analyst Rekt Fencer asserts that a “September dump is not coming” this year, pointing to Bitcoin’s performance in 2017 as a reference.
The chart comparison of 2017 and 2025 displays a nearly identical pattern. In both cycles, Bitcoin experienced a significant drop in late August, found stability at a crucial support zone, and then reversed to head higher.
In 2017, that retest indicated the last shakeout before BTC surged to $20,000.
Fast forward to now, Bitcoin is once again resting near a multi-month base between $105,000 and $110,000, which could serve as a launching point for another significant upward movement.
The $105,000–$110,000 range previously acted as resistance but has now transitioned into support, which is seen as a classic bullish structure in technical analysis.
One essential positive indicator is the so-called “hidden bullish divergence.” Even though Bitcoin’s price has dropped, its relative strength index (RSI), a widely used momentum indicator, has not decreased as significantly.
This typically implies that the market is not as weak as the price chart indicates, suggesting that buyers are quietly re-entering the scene.
Analyst ZYN believes that Bitcoin could be on track for a new all-time high exceeding $124,500 within the next 4–6 weeks, due to these technical patterns that justify a potential rally in September.
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Currency traders are growing bearish on the dollar, attributing it to a slowing US economy and anticipated Fed rate cuts, which dampens sentiment. They forecast the greenback to slide another 8% this year, a decline exacerbated by Donald Trump’s critiques of the Fed.
As of Sunday, the 52-week correlation between Bitcoin and the US Dollar Index (DXY) had fallen to -0.25, marking its lowest level in two years.
This change enhances both Bitcoin’s and the wider crypto market’s chances of rising in September, provided the dollar continues to weaken.
“The Fed will start the money printers in Q4 of this year,” analyst Ash Crypto remarked last week, adding:
This article does not provide investment advice or recommendations. Every investment and trading decision carries risk, and readers should perform their own research before making any decisions.
