Kraken predicts Bitcoin will dip in September and then return to aggressive volatility
Cryptocurrency exchange Kraken has forecast that Bitcoin is likely to decline this September, citing its August 2020 volatility report. The exchange’s analysis suggests the asset could post negative returns this month, continuing a pattern the firm has observed historically for September.
Kraken’s report highlights that September has historically been Bitcoin’s weakest month, with average returns near -7%. While Bitcoin’s monthly returns so far this year have often trailed their long-term averages, Kraken argues that the odds favor an even weaker performance in September before any recovery or renewed momentum emerges.
Despite the bearish near-term outlook, the report also identifies several bullish signals. One notable observation is that Bitcoin’s share of the total crypto market capitalization has remained relatively steady for more than a year. Kraken interprets that stability as consistent with a broader bull market trend, since persistent market share at high levels often accompanies longer-term strength in an asset.
Looking further ahead, Kraken anticipates a period of pronounced volatility after the expected September lull. The report points to historical episodes in which Bitcoin’s annualized volatility bottomed between 15% and 30% and then surged dramatically. According to Kraken, in 12 prior instances volatility rose from those lows to averages near 140%, and prices followed with substantial gains—on average returning +196% over a typical 94-day window. As of the end of August, Kraken notes that 38 days had passed since the volatility low of 23% set on July 24; by that point volatility had already climbed to 44% and the price had gained roughly 25% from that low.
These patterns imply there may still be room for meaningful upside in the months that follow, if past episodes repeat. Kraken also points out that September tends to display some of the weakest average volatility of the year, suggesting the market may not accelerate into a new high-volatility regime until the fourth quarter.
That said, Kraken cautions that historical tendencies are not guarantees of future performance. Markets evolve, and Bitcoin’s recent behavior has shown signs of breaking from some previously reliable patterns. For example, last month Bitcoin’s correlation with the S&P 500 moved dramatically: it reached a local peak near 0.84 before collapsing to around -0.02, illustrating how quickly relationships between assets can change.
In summary, Kraken’s analysis paints a two-part scenario: a likely short-term decline or subdued performance in September—consistent with historical averages for that month—followed by a potential return to sharper volatility and stronger gains later in the year. Investors should weigh these historical insights alongside current market conditions and exercise caution, remembering that past patterns do not ensure identical outcomes.