A weaker dollar and Fed rate cuts can be significant tailwinds for BTC price.
Bitcoin (BTC) is set to close August in the red, its first down-month since April, stoking fears that the downturn could deepen as September begins.
Bitcoin has a well-established tendency to slide in September.
Since 2013, Bitcoin has closed in the red for eight of the past twelve months, with average returns slipping about -3.80%.
Market veterans call it the “September Effect,” a month when traders tend to lock in profits after summer rallies or reposition portfolios ahead of Q4. Since 1928, for instance, the S&P 500 index’s returns in September have averaged around -1.20%.
Often trading in sync with broader risk assets, Bitcoin can become a victim of this seasonal drag.
However, since 2013, every green September for Bitcoin has come only after a bruising August, a pattern that hints of sellers front-running.
Related: Bitcoin price loses key multiyear support trendline: A classic BTC fakeout?
Analyst Rekt Fencer says that a “September dump is not coming” this year, citing Bitcoin’s performance in 2017.
The chart overlay of 2017 and 2025 reveals a near-mirror image. In both cycles, Bitcoin slipped sharply in late August, found footing at a key support zone, and then reversed higher.
Back in 2017, that retest marked the final shakeout before BTC price rocketed to $20,000.
Fast-forward to today, and Bitcoin is once again hovering near a multimonth base between $105,000 and $110,000, a level that could be the launchpad for another parabolic leg upward.
The $105,000-$110,000 zone acted as resistance earlier in the year, but it has now flipped into support, a classic bullish structure in technical analysis.
One important upside signal comes from the so-called “hidden bullish divergence.” Even though Bitcoin’s price has dropped, its relative strength index (RSI), a popular momentum indicator, hasn’t fallen as much.
That usually means the market is not as weak as the price chart suggests, hinting that buyers are quietly stepping back in.
Analyst ZYN suggests that Bitcoin could be on track for a fresh all-time high above $124,500 within the next 4-6 weeks, owing to these technical patterns that justify a potential rally in September.
Currency traders are turning bearish on the dollar as a slowing US economy and expected Fed rate cuts weigh on sentiment. They see the greenback sliding another 8% this year, a decline compounded by Donald Trump’s criticizing the Fed.
As of Sunday, the 52-week correlation between Bitcoin and the US Dollar Index (DXY) had slipped to -0.25, its weakest level in two years.
That shift improves Bitcoin’s, as well as the broader crypto market’s, odds of climbing in September if the dollar’s slump continues.
“The Fed will start the money printers in Q4 of this year,” analyst Ash Crypto said last week, adding:
“Two rate cuts mean trillions will flow into the crypto market. We are about to enter a parabolic phase where Altcoins will explode 10x -50x.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
