Ethereum’s August Rally Sparks Questions: Will History Repeat with a September Downtrend?

Ethereum’s August Surge Raises Investor Optimism

Ethereum has been one of the standout performers in August, rising 25% month-to-date and trading around $4,759 at the time of writing, according to CoinMarketCap. ETH opened the month at $3,807, gaining nearly $952 in value.

On Friday, the cryptocurrency hit fresh highs above $4,867, fueled by dovish remarks from U.S. Federal Reserve Chair Jerome Powell at the Jackson Hole Symposium, which sparked expectations of a potential September rate cut.

September Has Historically Been Bearish for ETH

Despite the bullish momentum, historical data suggests caution. Since 2016, Ethereum has only posted gains in August on three occasions—2017, 2020, and 2021—and each time it recorded losses in September, according to CoinGlass.

• 2017: ETH soared 92.86% in August, only to drop 21.65% in September.

• 2020: ETH gained 25.32% in August, followed by a 17.08% decline in September.

• 2021: ETH rallied 35.62% in August, then slipped 12.55% in September.

Crypto trader CryptoGoos noted on X: “ETH seasonality in September during post-halving years is typically negative. Will this time be different?”

Since 2016, September has delivered an average loss of 6.42% for Ether. Source: CoinGlass

Related: Bitcoin Hodler Sells $60M BTC After 7 Years, Rotates Into $282M Ether Long

Spot Ether ETFs and Treasury Holdings Could Break the Pattern

This year’s market environment looks very different from past cycles. Spot Ethereum ETFs and corporate treasury investments in ETH are providing new demand drivers that didn’t exist during previous August rallies.

• Corporate Treasuries: As of Aug. 11, companies held over $13 billion worth of ETH in their balance sheets. BitMine alone expanded its position to $7 billion, with chairman Tom Lee reportedly adding another $45 million this month, according to Arkham Intelligence.

• ETF Flows: Spot ETH ETFs saw approximately $2.79 billion in net inflows in August, while spot Bitcoin ETFs recorded $1.2 billion in net outflows, according to Farside data.

This divergence underscores a shift in investor preference toward Ethereum exposure. Nate Geraci, president of NovaDius Wealth Management, called it a “notable shift” in fund flows.

Bitcoin’s Market Share Declines as ETH Gains Ground

Bitcoin’s dominance—the measure of its share of total crypto market capitalization—has slipped 5.88% in the past 30 days to 58.19%. Analysts often view declining Bitcoin dominance as a sign of capital rotation into altcoins, particularly Ethereum, during periods of market strength.

Source: Satoshi Stacker

Conclusion: September Could Be a Turning Point for Ethereum

Ethereum’s rally in August has investors optimistic, but history suggests September has often been a stumbling block. With billions flowing into ETFs and treasuries, however, this cycle may not follow the same seasonal pattern.

If the Federal Reserve confirms a September rate cut and ETF inflows continue at their current pace, Ethereum could have enough support to defy past trends and potentially push toward new all-time highs.

Still, traders should remain cautious—history doesn’t always repeat, but it often rhymes.

Related: Crypto Funds See Nearly $1B in Outflows as Bitcoin and Ether ETFs Face Pressure