After BTC surged 25% in August, can the September Fed rate hike expectations put an end to the bull market?

According to WooFunai, Bitcoin (BTC) recorded an increase of about 25% in the past August, setting the August record for the first positive return since 2021. This performance is second only to 65.6% in 2017 and 30.7% in 2013, ranking the third best in history. As of September 1, the BTC price had fallen back to around $77,000, and the market entered a brief recuperation period. Bitwise's data further confirms this strong rebound, but the question that comes with it is: as the market enters what is known as the “hardest” September in history, will this round of macro-liquidity be sustainable?

Looking at it from a historical statistical perspective, the bulls are indeed facing serious challenges. According to CoinGlass's long-term tracking data, September has historically been one of the weakest months for Bitcoin's performance, with historical average returns hovering between -3% and -4%. More importantly, in those years where August saw a significant rise, September was often accompanied by a sharp return in profits. DowJonesMarketData's statistics also confirm this seasonal pattern: since 2014, September was the worst month for Bitcoin's average performance, with an average decline of about 2.2%.

However, there is a logical flaw in directly equating seasonal data with the laws of the market. The underlying structure of the current Bitcoin market is quite different from 2014 or 2017. The introduction of spot ETFs, the deep involvement of institutional capital, the maturity of the options market, and changes in macro-liquidity have all formed a new pricing logic. Therefore, instead of struggling with the historical inertia of “whether September is bound to decline,” it is better to thoroughly analyze whether the core funding logic that drove the sharp rise in August is still valid.

The real engine of the August market was not a simple speculative rebound, but a macro-narrative based on “dollar credit transactions.” The US Treasury Department announced on August 19 that starting September 9, it will raise the maximum limit of long-term treasury bond liquidity repurchases from US$2 billion to US$4 billion, doubling the scale and continuing until November 4. This move was interpreted by the market as a clear signal that the policy level is trying to suppress upward pressure on long-term bond yields and improve the liquidity of the financial system. According to data compiled by WooFunai, as the release of funds from financial accounts may improve the liquidity of the banking system, the correlation between Bitcoin and gold has risen to a six-year high, and “currency depreciation transactions” have once again become the core theme of the market. Bernstein analyst Gautamchhugani pointed out that the 40-year cycle of falling long-term interest rates is over, and rising government debt and concerns about currency purchasing power will continue to increase the attractiveness of scarce assets. He predicts that Bitcoin is expected to reach 150,000 US dollars by 2027 and hit 300,000 around 2029. Geoff Kendrick, head of digital asset research at Standard Chartered Bank, also emphasized that the US government's intervention in the bond market just strengthened Bitcoin's core logic as a hedge against fiat currency systems and policy risk assets.

However, after entering September, the macro environment became complex and full of uncertainty. Federal Reserve Chairman Kevin Warsh's speech at the Jackson Hole meeting at the end of August sent a hawkish signal, clearly stating that the inflation data is more worrying than the job market: PCE is still as high as 3.7% year over year, and the six-month decline trend has reached 4.1%, far higher than the 2% target. As of September 1, due to rising oil prices and rising global bond yields, market expectations for the Federal Reserve's interest rate hike in September have heated up sharply, and pricing shows that the probability of interest rate hikes has risen to about 68%. Meanwhile, the US 10-year Treasury yield once soared to 4.798%. Given that the Federal Reserve's next interest rate meeting is scheduled to be held from September 15 to 16, if inflation heats up again and policies are tightened, the August liquidity trading logic may be reversed.

Despite macroeconomic headwinds, institutional funding has not been fully withdrawn. According to Farside data, BlackRock (BLK.US) IBIT is still the main entry point for capital, and US spot Bitcoin ETFs showed a clear net inflow in August. Bitwise's research further indicates that there have been positive changes in the on-chain structure. Both the long-term holder model and the “risk-onTransition” model have shifted to a risk-appetite state, but the market needs to break through the key resistance level of $83,000. This position not only corresponds to technical resistance, but also roughly matches the average capital cost of ETF investors.

In response to market trends in September, Decrypt analyst JoseAntoniolanz deduced three possible scenarios. The first type is a high-probability post-shock breakthrough: as long as the $73,000-75,000 bullish line is not effectively broken, and ETF funds continue to flow in and US bond yields are manageable, BTC may complete a change of hands in the $75,000-$83,000 range, testing $83,000 again. Once the volume stabilizes in this position, the technical structure will improve significantly. The target for the next phase may point to the $92,000-$100,000 area, of which $81,500-82,500 is seen as the first resistance level. The second scenario is a shock wash: given the 25% increase in August and the short-term profit market is huge, the market may fluctuate in a large box of more than 70,000 dollars around September 16 to absorb the enthusiasm. The third type is a risk scenario: if oil prices continue to rise, the Federal Reserve confirms interest rate hikes, 10-year treasury yields rise further, and ETF net outflows continue, after BTC falls below $73,000, the August market may degenerate from a “bull market reversal” to large bears to make up for large bears. The next important support is around $68,900. Taken together, $73,000 to $75,000 is the last line of defense for bulls, and $83,000 is a watershed moment. The September 15-16 Federal Reserve meeting will be a key variable in determining the direction of the next round. If $83,000 is effectively broken through, the “September Curse” will once again expire, and the August rise will be confirmed as the starting point for a new trend; conversely, if liquidity is tightened again, the lessons of history may be repeated.