“The rear view mirror is always more clearer than the windshield.”
No one can predict the future with 100% certainty, but we can learn from the past. Looking back at how the markets have performed during previous months and years can give you an idea of what may be in store for the future. Risk management is the one thing you can control while you wait for good opportunities to arise.
In the stock market, the month of September is typically a “bloody month”, or a red month, because of how poorly the stock market performs.
According to the "Stock Trader's Almanac," on average, September is the month when the stock market's three leading indexes usually perform the poorest. This has been termed “The September Effect.”
The September Effect is a market anomaly and not related to any particular market event or news.
What about the cryptocurrency market? Historically, how has Bitcoin performed during the month of September? Will this upcoming September be a red month?
Looking back at the Bitcoin charts, it’s easy to see that Bitcoin tends to see negative returns in the month of September.
As a crypto investor, should you be worried?
Over the last decade, seven out of ten Septembers were red, and the last five years have been red. Interestingly, the average historical negative monthly return for Bitcoin in the month of September is only about 8%.
In retrospect, it seems that the “Red September” for Bitcoin has been made out to be a bigger deal than it really is.
In contrast, the months of April and May have historically been green months. Both were red in 2021 and in 2022.
In the stock market, September is not the worst trading month every year. The same can be said about the cryptocurrency market.
As always, investors and traders should be cautious this month. The Bitcoin Fear and Greed index has settled at “Fear.”
During the first few days of September we saw that Bitcoin was struggling to regain the $20,000 zone… but the close of the first week it had closed in the green.
This last week Bitcoin was extremely volatile and had dropped as low as $18,500, but is now performing strong and looks to be closing above $21,000 on the weekly. In the short term analysis Bitcoin is bullish, but zooming out on the weekly and monthly charges I still believe Bitcoin is bearish for now.
My big picture is that we will see Bitcoin fall to the $15,000-$16,000 range before gradually starting to make its way back up. Bitcoin has been in this falling wedge pattern since November 2021 and we’ll just have to wait and see how it plays out.
If you have the spare funds then this could be a great discount to buy up some Bitcoin for the long term.
Anything can happen. Always expect the unexpected. Stick to your plan. Take profits. Set your stop losses. Don’t get greedy.
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*Disclaimer- I am not a certified financial planner/advisor, certified financial analyst, economist, CPA, accountant, or lawyer, or anything important for that matter. The contents of this article are for informational, educational, and entertainment purposes only and do not constitute financial, accounting, or legal advice. Always do your own research.*
