Bitcoin enters ‘Rektember’ as rate-hike risk combines with seasonality to threaten rally
Bitcoin faces potential market volatility in September due to historical seasonality and concerns over a possible Federal Reserve interest rate hike. Macroeconomic pressures, including rising Treasury yields and geopolitical instability, are weighing on risk assets.
Why it matters
Bitcoin's performance is increasingly correlated with traditional macroeconomic indicators, making it a bellwether for investor sentiment regarding global monetary policy.
However, the past three Septembers have all delivered gains, offering some encouragement to bitcoin bulls. After climbing 25% in August, BTC’s strongest month since November 2024, the market could be due for a period of consolidation, if not a correction.
The macro backdrop also presents significant headwinds. Fed Chair Kevin Warsh’s hawkish Jackson Hole speech last Friday, which emphasized elevated inflation, has contributed to a global bond sell-off. Many sovereign yields have reached new cycle highs, with the U.S. 10-year Treasury yield rising to 4.784%.
Markets are now pricing in a 66% probability of a 25-basis-point rate hike at the Fed’s Sept. 16 meeting, followed by another potential rate boost by the end of the year. That would take the federal funds target range to 4.00-4.25% by the close of 2026.
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