Bitcoin Faces 'Red September' Fears Amid Shifting Fed Expectations

Bitcoin's September performance has historically been weak, earning it the nicknames 'Rektember' and 'Red September'. The cryptocurrency has ended September lower in eight out of 13 years since 2013, with an average return of -2.97% and a median return of -2.44%. However, recent trends suggest this pattern may be fading.

In August, Bitcoin gained 24.95%, reviving 'Rektember' fears. But the cryptocurrency is entering September under pressure due to shifting Federal Reserve expectations and rising oil prices from U.S.-Iran tensions. The Fed rate hike odds have jumped to 66.4% post-Warsh, with 10-year yields at 4.78%.

Analysts are split on whether Bitcoin will reject toward $65K-$70K or retest $74K-$75K before a push to $82K-$87K in October. Peter DiCarlo estimates a 60% chance of rejection, which could send BTC toward $65,000-$70,000.

Institutional demand has been strong, with spot Bitcoin ETFs recording about $3.52 billion in net inflows in August. However, this may not be enough to offset the current market pressures weighing on financial markets.