Bitcoin and the overall crypto market haven’t exactly had an exciting summer of price action, with the king of crypto essentially trading sideways and most altcoins losing value at a faster rate than BTC. Even the approval of spot Ethereum ETFs didn’t do much for the market, though that was somewhat expected. But why is September a bad month for crypto performance and is there reason for concern?
Flat Summer Prices
Though most people think of September as the fall, it is still the summer for most places, it’s not until the last week of September that fall begins. And the thing about the summer and crypto is that it’s never really been a good time for price performance. It doesn’t matter whether it’s Bitcoin or your favorite altcoin, there has never really been a good summer for crypto markets.
Bitcoin in particular, has pretty much always traded sideways during the summer, other than during the COVID boom in 2020 when there was so much money being printed that everyone was looking to invest while they were stuck inside. It hasn’t had a September with a gain of more than 3% in the past 5 years either.
Investing in general isn’t nearly as hot as the weather during the summer, probably because most people are out and about doing things, and spending money on summer activities. But because of these flat summer prices, the fall months tend to be good ones for the digital asset market.
October is Uptober
Fall is so good for crypto markets that October in particular is referred to as “Uptober” within the community. On a median basis, October has averaged returns of 27% for Bitcoin, with it having a 40% jump back in October 2021. November is typically okay for Bitcoin, with the FTX collapse skewing the data to a more negative view.
Bitcoin is showing the same pattern this year as it did last year, with an overall negative return for the summer months, and last year Bitcoin saw a 28% gain in October. Whenever Bitcoin has a poor summer, it always has a good fall. Though it can’t be guaranteed that this will happen again, it has happened more times than not.
Geopolitical Factors Abound
Though Bitcoin is certainly set up to have its normal jump in price in October, there are a variety of geopolitical events that could certainly affect its price action.
The chance of a large war breaking out in the middle east is certainly looming over riskier asset markets such as crypto, not to mention the continued conflict between Russia and Ukraine.
Additionally, the US federal election is upcoming and its results are likely to have some sort of effect on crypto markets as well, as each party has differing views on how to foster crypto development in the nation.
Closing Thoughts
Bitcoin and the entire cryptocurrency market have had their typical summer, now it will be interesting to see if these markets have their typical fall. With so many factors at play that could and likely will affect the price action of risk-on assets such as cryptocurrencies, this could be a fall unlike many for crypto.
