Original: spotonchain , compiled by Followin
September is here, and many investors are beginning to be cautious about Bitcoin's historical performance this month. Historically, September is one of the weakest periods for cryptocurrencies. However, despite these historical trends, several factors suggest that this September may not follow the usual pattern. Considering historical data, liquidations from strong selling forces, the strength of long-term holders, the new purchasing power that may come from Bitcoin ETFs, and favorable socioeconomic conditions, this analysis will explore why the price of Bitcoin may not necessarily fall in the coming month.
1. Historical background and performance in September
September has historically been a challenging month for Bitcoin, with an average return of negative 4.78% and a 72.7% chance of a losing month. This pattern, coupled with the disappointing performance of August 2024, may have some investors worried about another difficult month. However, a closer look shows that while September often sees negative returns, this is not always the case. In fact, in the seven years of August closes being negative, only four times (57.1%) have led to a continuation of the negative trend in the following September, while three times (42.9%) saw positive returns. This data suggests that while the narrative of September as a negative month makes sense, it does not guarantee a negative return outcome for Bitcoin, leaving room for optimism. 
Figure 1. Bitcoin monthly returns since 2013.
2. Strong selling forces have been removed
One of the most important factors that could support Bitcoin prices in September is the removal of the major selling pressure that occurred in July and August 2024. Several key events contributed to this:
2.1. Bitcoin sales by the German government
In January 2024, the German government seized approximately 50,000 BTC from the Movie2k pirate site. Almost all of these bitcoins were sold between June and July 2024, totaling 49,859 BTC ($3 billion). This massive sell-off contributed to the price drop seen this summer. However, with most of these bitcoins now off the market, selling pressure from this source has significantly diminished, reducing the likelihood of a similar effect in September. 
Figure 2. The German government allegedly sold 49,859 BTC ($3 billion) in June and July.
2.2. Mt. Gox Repayment
In June 2024, defunct Japanese bitcoin exchange Mt. Gox announced that it would begin repaying creditors in early July. Since then, 95,958 BTC ($6.07 billion) has been transferred to exchanges and custodial wallets for repayments. With only 44,898 BTC ($2.65 billion) left to be distributed to creditors, or about a third of the initial holdings, the majority of these repayments — and the associated selling pressure — are likely over, mitigating any potential negative impact on bitcoin prices in September. 
Figure 3. Mt. Gox currently holds 44,898 BTC ($2.65 billion), a third of its initial holdings.
2.3. Debt repayment by Genesis Trading
Genesis Trading filed for bankruptcy in January 2023 and completed a majority debt restructuring in August 2024. On August 2, the company distributed 24,068 BTC ($1.55 billion) for repayment, which led to a price drop earlier that month. Since this huge amount of funds has been liquidated, a similar large-scale sell-off is unlikely in September, which has brought some relief to the market. 
Figure 4. The severe market crash on August 5 occurred after Genesis Trading distributed 24,068 BTC ($1.55 billion) for repayments.
2.4. Crypto Funds Confiscated by Governments
Governments with large confiscated BTC holdings, such as the United States and the United Kingdom, may also pose a threat to the Bitcoin price. However, recent movements suggest that this risk may be exaggerated. The U.S. government, which holds 203,650 BTC ($12 billion), has already moved and sold some of its BTC holdings, but this was done through over-the-counter (OTC) sales, which had minimal impact on market prices. The British government, which holds 61,245 BTC ($3.62 billion), has not touched these funds since confiscating them in 2021. Therefore, the potential for government-related selling in the short term appears limited. 
Figure 5. The U.S. government transferred 35,516 BTC ($1.48 billion) to Coinbase in 2023 and 2024 at an average price of $41,637, but overall the price response was weak.
3. The strength of long-term holders
Another positive factor for Bitcoin is the strong position of long-term holders. According to CryptoQuant, long-term holders have added 262,000 BTC in the past 30 days, bringing their total holdings to 14.82 million BTC, equivalent to 75% of the total supply. 
Figure 6. Changes in long-term net positions in Bitcoin (30 days) (Source: CryptoQuant).
Additionally, many of the top anonymous Bitcoin wallets holding large amounts of BTC have remained dormant, indicating that these holders do not plan to sell in the near future. This strong holding pattern provides a solid foundation for Bitcoin, reducing the likelihood of significant downward pressure from long-term holders in September. For example, when analyzing the top 10 anonymous BTC holding wallets, we noticed that 7 wallets have been idle for more than 2 years. These 7 wallets hold a total of 237,816 BTC ($14.04 billion), accounting for 1.2% of the circulating supply. 
Figure 7. Status of the top 10 anonymous BTC holding wallets.
4. Bitcoin ETF rebounds in September
Based on the trends observed in the chart, Bitcoin ETFs could see modest positive net inflows in September. After slightly negative inflows in August, the pattern of alternating positive and negative months suggests a possible rebound. Considering that previous downturns were followed by recoveries, a conservative estimate is that net inflows in September could be between $500 million and $1.5 billion. However, this forecast is speculative and should be interpreted with caution as market conditions are changing rapidly. 
Figure 8. Monthly net inflows of 11 US Bitcoin ETFs alternate between positive and negative.
5. Favorable socio-economic conditions
Several upcoming socioeconomic events could further support Bitcoin’s price in September:
5.1. Expectations of a Fed rate cut
The Federal Reserve is widely expected to cut interest rates by 25 basis points in September 2024, the first rate cut in 13 months. A lower interest rate environment generally reduces the appeal of traditional investments and could prompt investors to turn to riskier, higher-return assets such as cryptocurrencies. This shift could create additional demand for Bitcoin or a Bitcoin ETF, offsetting some of the historical negative trends in September. 
Figure 9. Historical inverse relationship between interest rates and Bitcoin price (Source: Bloomberg).
5.2. FTX repays $16 billion in cash
FTX’s upcoming $16 billion cash repayment to creditors in late September and early October could also affect the cryptocurrency market. Many creditors are likely to reinvest in cryptocurrencies, potentially injecting a large amount of money into the market. Coupled with a lower interest rate environment, this could boost Bitcoin’s price. 
Figure 10. FTX creditor repayment summary (Source: Kroll).
5.3. Support provided by the US election
There is growing bipartisan support for favorable crypto regulations in the U.S., which could bolster investor confidence. For example, Kalama Harris has received public support from crypto leaders and is actively involved in the industry. Meanwhile, Donald Trump has reversed his previous stance on crypto and now advocates for looser regulations and the creation of a national strategic Bitcoin reserve. This bipartisan support could create a more favorable regulatory environment, further supporting Bitcoin's price.
in conclusion
While September has historically been a challenging month for Bitcoin, several factors suggest this year could be different. The removal of major selling pressure in July and August, the strong position of long-term holders, and upcoming favorable socioeconomic events all provide reasons to believe that Bitcoin's price may not necessarily follow its typical September pattern. While caution is always warranted, the outlook for Bitcoin in September 2024 appears to be more optimistic than historical data alone would suggest.
