In its August 2020 volatility report, U.S.-based cryptocurrency exchange Kraken has predicted that September will bring excessively negative returns for Bitcoin (BTC).

The report notes that historically, September is Bitcoin’s worst-performing month, with an average return of -7%. It points out that as Bitcoin has underperformed its average returns for most months of 2020, this month’s performance was likely to be even worse than usual.

Despite the bearish outlook for the short-term, the report identifies some glimmers of hope, including that a record share of Bitcoin’s supply has not moved in more than 12 months — with Kraken noting that “historically, this dynamic has foreshadowed a new bull market.”

The report adds that Bitcoin is likely to see aggressive fluctuations as the markets move further away from July’s local low or “suppressed pocket” for volatility:

Twelve times in the past, Bitcoin’s annualized volatility bottomed between 15% and 30% before climbing, on average, to 140% and returning +196% over 94 days. As of the end of August, 38 days have passed since the volatility low of 23% set on July 24, with volatility rising to 44% and price gaining +25%

“So, history indicates that we may have ample room for higher volatility and gains in the months ahead,” the report explains.

Kraken also notes that September has historically produced the weakest volatility on average, suggesting BTC may not see accelerated volatility until at least the fourth-quarter of 2020.

However, Kraken’s crystal ball is not necessarily a reliable guide to future events, with the exchange recently predicting that a BTC rally of between 50% and 200% was imminent on August 10 — when Bitcoin was trading for between $11,500 and $12,000, just $500 from the local top that precipitated the recent 20% retracement.

The report notes that August also saw Bitcoin’s correlation with gold push into a new all-time high of 0.97, before sharply falling back to 0.25.

Bitcoin similarly produced high correlation with the S&P 500 throughout most of August. After posting a local top of 0.84, correlation between BTC and the S&P 500 crashed down to minus 0.02, suggesting that Bitcoin may be breaking away from the meta-trend of the legacy markets.