September has historically been a difficult month for US stocks. And when it comes to the Bitcoin market, the so-called “September effect” may be just as widespread – and the performance of the BTC price this first week lends credence to the theory.
The Wall Street phenomenon has been well documented for nearly a century. Since 1929, the S&P 500 has fallen 55% in September; Open markets“It is the highest of any month and the only month in the last 94 years that has decreased by at least 50%.”
The analysis cites traders' vacation schedules and financial firms' fiscal calendar as possible factors.
Bitcoin's track record is relatively short. However, the market experienced a significant weakness in the first month of autumn. Since 2013, the price of Bitcoin has decreased eight times in September, according to him CoinGlass Data.
Property prices have started a slide of more than 8% this month, outpacing the average decline of 5% over the past decade. In the year September has been one of two average losing months since 2013, with June being the only negative month with a -0.35% average price movement during this period. On average, September is Bitcoin's worst month of the past decade.
Although bitcoin has only broken out of the September green three times since 2013, said Jake Ostrowski, an OTC trader at market maker Wintermuth. Decrypt The red trend is far from the gospel.
“Although the market likes to focus on the ‘September result' given its historical performance, the small sample size makes it difficult to use it as a leading indicator,” he said, pointing out that Bitcoin returned about 4% last September.
Ostrovskis points to several other factors driving Bitcoin's price action in the short-term that may be believed to be of greater importance. He said liquidity trends, macroeconomic conditions and the overall sentiment of the crypto market are better metrics to watch than any calendar day.
When looking at average returns, it's important to consider outliers, says Zach Pandle, research manager at Grayscale. Decrypt.
For example, Bitcoin's average return of 46% in November was heavily influenced by gains made in 2013, when the asset's price rose 450%. On the contrary, A few rough years for the S&P 500 in the 1930s contributed to the September effect on equities, he said.
“Bitcoin prices rose slightly last September, and October had the highest average returns in history,” Pandl said. “Therefore, we expect only the most impatient traders to position themselves for any September impact and for most investors to focus on the fundamentals of Bitcoin's progress. Like the upcoming Fed rate cut and growing institutional adoption.
Most economists consider the effect of September as an inexplicable anomaly and of little importance Investopedia. That's partly because it challenges the efficient market hypothesis, which states that an asset's secondary market price always reflects all available information.
Still, Bitcoin's weakness in September resulted in multiple gains. Bitcoin's average drop of 5% in September since 2013 is followed by a 22% jump in October and a 46% jump in November. In the year During the crypto market bull run in 2021, the trend is as “upHe said.
Edited by Ryan Ozawa and Andrew Hayward
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