Bitcoin Heads Into ‘Rektember’ With Fed Hike Bets Threatening Momentum

Bitcoin started September on a weaker note, falling roughly 1% below $78,000 as traders entered the historically difficult period often dubbed “Rektember.”

Since 2013, September has delivered Bitcoin’s weakest average monthly performance, with BTC declining about 3% on average and closing higher in only five years.

The recent trend is more encouraging, however, as Bitcoin has gained during each of the past three Septembers. Still, following a 25% rally in August — its strongest monthly advance since November 2024 — BTC could face increased selling pressure, consolidation or a correction.

The macroeconomic environment is also becoming less favorable for risk assets. Federal Reserve Chair Kevin Warsh struck a hawkish tone in his Jackson Hole remarks last Friday, emphasizing ongoing inflation concerns. His comments contributed to a global bond sell-off, pushing several sovereign yields to new cycle highs.

The U.S. 10-year Treasury yield climbed to 4.784%, while markets are pricing in roughly a 66% chance of a 25-basis-point rate increase at the Fed’s Sept. 16 meeting. Investors are also factoring in another potential hike before year-end, which could bring the federal funds target range to 4.00%-4.25% by the end of 2026.

Higher rates can hurt risk assets by tightening financial conditions and strengthening the U.S. dollar. Bitcoin is facing that pressure alongside other markets, while gold dropped more than 2% on Tuesday.

Geopolitical risks are adding to the uncertainty. Ongoing U.S. strikes against Iran have heightened tensions in the Middle East and helped push WTI crude nearly 2% higher over 24 hours to around $88 per barrel, its highest level since late July.

Stocks have also historically struggled in September. Since 1975, it has been the only month in which the S&P 500 has generated a negative average return.

For Bitcoin, the combination of seasonal weakness, elevated bond yields and rising expectations for Fed tightening could put August’s strong rally to the test as September gets underway.