Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Bitcoin plunged to a 12-day low on Monday, casting doubt on the anticipated “Uptober” rally, a historically bullish period for the cryptocurrency market. This downturn occurred just nine days before October, a month traditionally known for significant gains in Bitcoin, prompting debate among crypto analysts regarding the market’s immediate future.
Historical “Uptober” Trends
Historically, October has been a consistently positive month for Bitcoin, recording gains in 10 out of 12 instances since 2013, according to CoinGlass. The asset has not experienced an October loss since 2018, when it declined by 3.8%. In the bull market years of 2017 and 2021, Bitcoin saw substantial increases of 48% and 40% respectively, during October.
A similar surge in the current bull market year could potentially propel Bitcoin to approximately $165,000 from its present levels.
Arguments for an October Rally
Several analysts point to potential catalysts for an October surge. Bitcoiner Kyle Chassé highlighted a 92% probability of another Federal Reserve rate cut next month, according to CME futures predictions. Chassé stated that the “easing cycle is basically priced in” and increased liquidity, which he described as “the fuel Bitcoin and crypto thrive on,” is imminent.
Analyst “Sykodelic” predicted a market dip before a substantial October surge. They stated that after hitting a key level, the market would move “on to new highs and the start of the explosive final leg that will push the market into euphoria.”
Meanwhile, BitMEX co-founder Arthur Hayes suggested that crypto will enter an “up only mode” once the US Treasury achieves its target goal of filling the Treasury General Account (TGA), which recently surpassed $850 billion. Hayes commented that “With this liquidity drain complete, up only can resume.”
Cautions and Muted Expectations
Conversely, some experts advise caution against excessive optimism for October. Augustine Fan, head of insights at crypto trading software service provider SignalPlus, expects any Bitcoin rallies to be “relatively muted.” Fan cited extremely low implied volatility, weakening DAT inflow momentum, and the presence of profit-takers as factors likely to cap upside potential, adding that “Longer-term investors will have to be more patient before we expect new ATHs to be reached.”
Jeff Mei, chief operating officer at the BTSE exchange, believes that “the Uptober trend is less likely to occur this year given the macro uncertainty and the fact that September hasn’t seen markets fall.” However, Mei noted that if the Fed indicates “more aggressive measures to stimulate the economy,” this outlook could change.
Monday’s Market Downturn
The broader cryptocurrency market experienced a significant retreat on Monday morning, with total market capitalization declining by $80 billion over several hours. Bitcoin specifically fell to $114,270, marking its lowest point in twelve days.
Ether also took a hit, dropping more than 4% to below $4,300, which represents its lowest level in two weeks.
Key Takeaways
As October approaches, the crypto market faces conflicting signals, with historical trends and potential liquidity injections battling against present macro uncertainties and profit-taking pressures. The coming weeks will be crucial in determining whether the “Uptober” phenomenon will materialize this year.
