Bitcoin Ends August Down 6%: Can September Reverse?

Bitcoin Ends August -6.49% as Volatility Expands in September

Bitcoin's overall annualized rate of return for August 2025 was -6.49%, as it continues its historically poor seasonal pattern. September is still the most bearish month with average drawdown of 3.50% in all years.

This weakness is especially apparent in historical data, where September losses were preceded by strong August gains in post-halving years. However, the top crypto finished August in the red in 2025, which was different from the previous trend of "August up, September down."

BTC Monthly returns (%) | Source : Coinglass

This change increases the likelihood that downside pressure is already complete before September. Even so, the negative track record means caution is still advised as traders brace for potential volatility.

October has historically been one of the most bullish months with an average rate of +21.89% and has the potential to offer the next bullish cycle if Bitcoin can continue to hold its key supports.

Volatility Expands as Compression Phase Ends

Bitcoin is about to expand after a long period of compression. CryptoQuant data shows the 30-day volatility percentile went from 3% to 9%.

Historically, such very low readings have often been followed by strong directional moves, with the shift from consolidation phases into trending markets. This growth is taking place in a retracement off recent highs, which indicates early bearish activity.

Bitcoin Volatility -Based Risk (%) | Source : CryptoQuant

Previous cycles in 2021 and the middle of 2022 have seen volatility spikes that coincided with sharp corrections. Similar conditions are currently present, with fluctons rising as Bitcoin continues to sit above the $90,000 mark.

With volatility expanding further, the market may see more extensive volatility in the coming weeks. This indicates that consolidation could give way to larger movements in price soon.

On-Chain Metrics Show Resilience Despite Correction

The recent Bitcoin correction has led to concerns about a cycle top. However, on-chain metrics still reflect accumulation by long-term holders.

Exchange reserves are still decreasing, which indicates moderate selling pressure rather than broad distribution. NVT is under 50, which indicates high network activity relative to market capitalization.

It has not entered the overheated zone of MVRV near 3.6, which is normally associated with cycle tops and euphoric periods. This means that Bitcoin is not yet valued unsustainably.

Miner reserves are flat at 1.805M BTC, down only slightly this year, in contrast with the heavy selling at previous highs. Similarly, the aSOPR ratio has also not remained at levels that indicate overvaluation, adding weight to the view of additional growth potential.

These converging signals suggest that Bitcoin is in the process of a healthy correction within an overall bullish framework. As fundamentals continue to look good, conditions for new highs continue to look intact.

ETF Flows and Technical Patterns Support Bullish Outlook

US spot Bitcoin ETFs had net inflows of +3,018 BTC last week, reversing outflows of over 10,000 BTC prior to that. As such, this reversion to positive flows indicates renewed institutional confidence after recent price volatility.

BTC US Spot ETF Net Flows | Source : glassnode 

This year, the inflows aided the rallies, with several weeks seeing trading volumes over 20,000 BTC, pushing the price momentum higher. Positive flows would again stabilise Bitcoin around $100,000-$110,000.

At the same time, technical analysis shows a bullish megaphone pattern being formed on a daily chart. This expanding pattern indicates widening swings with repeated confirmations of support and resistance levels.

Bullish Megaphone Pattern | Source : X

Right now, Bitcoin is trading around $108,951, which is right at the bottom of the formation. Analysts expect the recovery point to be around $125,000, and the breakout levels can be higher than $130,000.

This pattern is consistent with increasing volatility, which implies larger price movements in the future. On the other hand, along with ETF inflows, the pattern suggests that the top crypto may advance further if support is maintained.