Bitcoin's Record Week Ends at $80,000 as September Seasonality Looms

September has a reputation for being a bad month on Wall Street, especially during US midterm election years. In fact, research by Hartford Funds shows that in the last 10 midterm cycles between 1986 and 2022, stocks suffered an average drop of 16.77% from their previous high before reaching their lows. Bitcoin is currently trading near $77,500, while US stocks remain close to record highs and long-term bond yields are unusually elevated.

According to Hartford Funds' study, the actual lows in these midterm cycles occurred at different points throughout the year, but September 2 marks an average low point across all 10 cycles. However, so far this year has refused to follow the usual script.

The Federal Reserve is currently debating a rate hike, not a cut, as Fed Chair Kevin Warsh emphasized during his Jackson Hole speech that curbing elevated inflation remains the primary focus. The 2% target is considered 'firm and fixed', and labor market conditions remain steady and consistent with full employment.