Investors Hold Breath as Bitcoin Tests Fate of "Red September" Curse

Bitcoin held steady in early September 2025 as investors closely watched for signs of Federal Reserve rate cuts, which could influence the cryptocurrency’s price trajectory. Despite lingering concerns over a potential 10% correction, the digital asset remained above the $100,000 threshold, with key resistance levels at $112,000 and $106,700 drawing attention from traders. Analysts highlighted the growing liquidity risks and bearish sentiment, particularly with Bitcoin whales offloading over 100,000 BTC in the past 30 days, signaling heightened risk aversion among large investors. The Taker Buy/Sell Ratio on Binance also showed bearish divergence, reinforcing caution among traders amid declining order-book liquidity [1].

The upcoming release of US macroeconomic data, including the Producer Price Index (PPI) and Consumer Price Index (CPI), heightened the focus on the Federal Reserve’s monetary policy. The CME Group’s FedWatch tool indicated that markets had fully priced in a rate cut for the September Federal Open Market Committee (FOMC) meeting, with even a modest possibility of a larger-than-expected reduction. This expectation contrasted with the Fed’s delayed response to inflationary pressures and signs of a weakening labor market. Meanwhile, other central banks, such as the European Central Bank, Bank of England, and Swiss National Bank, had already initiated rate-cutting cycles earlier in 2025 [1].

Amid these macroeconomic uncertainties, institutional capital showed signs of a renewed flow into Bitcoin. Exchange-traded products (ETPs) backed by BTC saw $444 million in net inflows in the week ending Sept. 5, while Ether (ETH)-denominated ETPs experienced over $900 million in outflows. This re-rotation from altcoins back to Bitcoin was attributed to shifting investor preferences and the maturation of the crypto asset class. US spot Bitcoin ETFs also saw inflows of approximately $250 million in the previous trading week, contrasting with more than $750 million in outflows for Ether ETFs [1].

Bitcoin’s historical performance in September, often dubbed “Red September,” added another layer of caution among investors. Historically, the month had delivered an average return of –3.77% for Bitcoin over 12 years from 2013 to 2024. Regulatory crackdowns in China in 2017 and 2021 exacerbated these losses, while the 2020 DeFi Summer and 2021 Terra collapse further reinforced the month’s negative connotations. However, Bitcoin has defied this trend in recent years, posting gains in 2023 and 2024. The approval of spot Bitcoin ETFs in early 2024 and the subsequent rate cuts by the Fed helped break the “Red September” curse, offering a more favorable backdrop for 2025 [2].

As the market entered the final stretch of September, Bitcoin faced both opportunities and risks. A potential rate cut in mid-September could provide further support for the crypto market, particularly for Bitcoin, which has historically outperformed in dovish monetary environments. However, the bearish whale activity and declining Taker Buy/Sell Ratio suggested that liquidity could remain a challenge. Investors remained split between caution and optimism, with some advocating for accumulation strategies during market dips while others awaited clearer signals from macroeconomic data and central bank actions [1].

Source:

[1] Here's 5 Things Bitcoin Traders Are Talking About This Week (https://cointelegraph.com/news/btc-dip-predictions-fall-below-90k-5-things-to-know-in-bitcoin-this-week)

[2] Bitcoin set to beat 'red September' dip for third straight year (https://cointelegraph.com/news/bitcoin-breaks-red-september-streak-third-year)