Bitcoin Faces September Test Amid 'Red September' Jinx

Bitcoin's August gains have slowed, but its September performance remains uncertain. Over the past 13 years, Bitcoin has closed lower in September eight times, with an average return of minus 2.97 percent and a median of minus 2.44 percent. This trend is often referred to as 'Red September.' In contrast, October has been the strongest month for Bitcoin, with an average return of 19.92 percent and a median of 14.71 percent.

Wall Street also experiences seasonality in September, with the S&P 500's average return since 1945 being about minus 0.6 percent. Explanations for this trend include selling losers ahead of the mutual fund fiscal year-end, institutions resuming risk-reduction trades after summer vacations, and the U.S. Federal Reserve meeting schedule.

Another factor is that Bitcoin has recently moved more like high-beta technology stocks. In 10 midterm election cycles since 1986, the average low in U.S. stocks was formed on Sept. 2, with an average decline from the prior peak of close to 17 percent.