Bitcoin Faces ‘Rektember’ as Rate-Hike Bets Put August Rally at Risk

September has historically been a difficult month for risk assets, with Bitcoin often bearing the brunt of the weakness.

Bitcoin started September on the back foot, slipping about 1% below $78,000 as traders entered the month nicknamed “Rektember.” Since 2013, September has been Bitcoin’s weakest month on average, delivering a roughly 3% decline and ending higher in only five years.

There is still some reason for optimism. Bitcoin has gained during each of the past three Septembers. Still, after surging 25% in August for its strongest monthly performance since November 2024, BTC could be vulnerable to a period of consolidation or even a pullback.

The broader macroeconomic environment is adding to the pressure. Federal Reserve Chair Kevin Warsh delivered a hawkish message at Jackson Hole last Friday, highlighting persistent inflation concerns and helping trigger a sell-off in global bonds. Several government bond yields have reached fresh cycle highs, while the U.S. 10-year Treasury yield climbed to 4.784%.

Traders are now assigning a 66% probability to a 25-basis-point rate increase at the Fed’s Sept. 16 meeting. Markets are also pricing in the possibility of another hike before the end of the year, potentially pushing the federal funds target range to 4.00%-4.25% by the end of 2026.

Higher interest rates generally create a tougher environment for risk assets by tightening financial conditions and boosting the appeal of the U.S. dollar. Bitcoin is facing the same pressure as other markets, with gold falling more than 2% on Tuesday.

Geopolitical tensions are adding another layer of uncertainty. Continued U.S. strikes against Iran have intensified concerns across the Middle East, sending WTI crude oil about 2% higher over 24 hours to $88 a barrel, its highest level since late July.

Traditional markets have also historically struggled in September. Since 1975, the month has been the only one in which the S&P 500 has recorded a negative average return.

With Bitcoin coming off a 25% August rally, rising Treasury yields and growing expectations for tighter monetary policy could make September a tougher test for the cryptocurrency.