Bitcoin is up 40% over the last eight months, but the next four week could be tumultuous if history is any guide. Dubbed as “Septembear” by many traders, the end of 2024’s third quarter has a dreary outlook.
Since March, the Bitcoin price has been stuck. Bouncing between $53,000 and $73,000, the world’s first and largest cryptocurrency has left investors and traders to endure a prolonged “crab market,” which simply means a market trend where the price fluctuates around the level for a long period of time. Some traders are now anticipating an end to this choppy phase of the market. If they’re right, will the price go up or down?
Historical data from Septembers past doesn’t offer a reassuring answer.
- September has the worst average monthly returns for Bitcoin and the second worst median monthly returns, according to data from CoinGlass.
- Last year was the first September with a positive monthly return for Bitcoin since 2016.
What if Bitcoin has another terrible September?
Here’s a look at monthly returns from three of the worst Septembers in Bitcoin’s history mapped as percentage drawdown possibilities on a current chart of Bitcoin’s price. This visual is nothing more than a mental exercise to explore potential outcomes if history repeats itself. Of course, there are no guarantees that Bitcoin will drop this far or that its price will drop at all.
Okay, but what’s the silver lining in all of this?
Bearish sentiment is almost uniformly reviled by anyone in the Bitcoin industry, and rightfully so. For 15 years, an army of hateful skeptics have slandered Bitcoin with one colorful insult after another only to be faced with its relentless price appreciation over months and years. But Bitcoin investors are not strangers to market crashes, and these opportunities are often relished by investors looking to accumulate more coins.
“Zoom out” is the popular retort to bearish discussions around Bitcoin, and some traditional finance teams are doing just that. For example, VanEck released its price predictions for Bitcoin by 2050. Their “worst case” prediction places Bitcoin at more than $130,000 and their “best case” is targeting over $52 million. Their base case, however, is just below $3 million.
Could September provide another chance for bullish investors to buy more? If history provides any indication, the answer is probably yes. So, be ready to buy the dip.
