Bitcoin fell below $78,000 on the first trading day of September, entering a historically weak period for the cryptocurrency while investors absorbed renewed signals of tighter Federal Reserve policy and cooling US consumer confidence.
The RealClearMarkets/TIPP Economic Optimism Index declined to 45.6 in September, below the forecast of 46.2 and down 0.6 points from the previous month. A reading below 50 indicates pessimism, and the latest figure extends a trend of subdued confidence that has persisted through 2025. The decline was driven by weaker assessments of the six-month economic outlook and personal financial prospects, according to the survey’s components.
The softer sentiment data matters because consumer spending accounts for roughly 70% of US economic activity. Economists warn that a sustained drop in confidence could signal slower consumption ahead, affecting retail sales, housing demand and corporate earnings. The reading also comes as inflation remains above the Federal Reserve’s 2% target, while wage growth has not kept pace with rising costs for many households.
Against this backdrop, Bitcoin’s September weakness has been amplified by hawkish Fed signals. Federal Reserve Chair Kevin Warsh, speaking at the Jackson Hole symposium, indicated that inflation remains elevated and signaled an intention to maintain a tight policy stance. His remarks contributed to a sell-off in global bond markets, with the US 10-year Treasury yield rising to 4.784%.
According to CME FedWatch data, markets are pricing in a 66% chance of a 25-basis-point rate hike at the September Federal Open Market Committee meeting, with speculation about an additional hike before the end of the year. Higher yields tend to strengthen the dollar and drain liquidity from risk assets, creating a challenging environment for Bitcoin, which is often viewed as a risk-on asset.
September has long been considered the worst month for Bitcoin, with average returns of around -3% since 2013, according to data from CoinDesk. This seasonal weakness has earned the month the nickname “Rektember” among crypto traders. However, the pattern is not absolute: Bitcoin has closed higher in September for the past three consecutive years, suggesting that seasonal trends can be overcome by stronger market forces.
For investors, the combination of seasonal pressure, hawkish monetary policy expectations, and weakening consumer sentiment could keep Bitcoin under pressure in the short term. The approaching FOMC meeting remains a key variable, and market participants will closely watch inflation data, Treasury yields, and any shift in rate hike expectations.
