Could this year’s October see Bitcoin’s remarkable “Uptober” gains reoccur, especially following its record-breaking September, or are we in for a novel shift in Bitcoin’s market behavior?
October reignites optimism
As October approaches, the Bitcoin (BTC) community is alive with enthusiasm. Historically, this month marks a prime time for Bitcoin, reviving the term ‘Uptober’.
Yet, let’s take a moment to reflect on September. Typically, it has been a difficult month for Bitcoin, with prices often declining. In fact, from 2017 through 2022, Bitcoin ended every September in the red. It was consistently one of BTC’s poorest performing months.
This year, however, 2024 had a different trajectory. Instead of a downturn, Bitcoin experienced a remarkable rise! For the first time in years, September recorded a 9.3% gain — the best performance since Bitcoin’s creation, based on Coinglass data.
Just to illustrate, BTC only saw a 3.91% increase in September last year. As of Sep. 30, Bitcoin is trading at $64,600, having risen approximately 2% over the previous week.
A significant portion of this momentum can be attributed to recent actions by the U.S. Federal Reserve. On Sep. 18, the Fed lowered interest rates by 50 basis points, providing a solid boost to the market.
Historically, October has shown strong performance for Bitcoin, averaging a return of 22.9%. Given BTC’s current strength as September concludes, what might lie ahead for Bitcoin?
Factors influencing Bitcoin’s October forecast
As we enter October, several critical factors appear to be aligning favorably for Bitcoin, paving the way for a potentially optimistic month. Let’s explore them in detail.
Impact of the halving
Bitcoin’s fourth halving occurred in April 2024, reducing mining rewards from 6.25 BTC per block to 3.125 BTC.
Historically, this reduction in supply has often triggered bullish price movements, though generally not right away. Bitcoin tends to show a post-halving trend characterized by oscillations between highs and lows before building significant momentum.
Interestingly, studies indicate that Bitcoin’s price cycles generally start gaining traction about 170 days after a halving and peak around 480 days later.
With October marking approximately 170 days since the last halving, many are speculating this could herald the beginning of a significant upward trend for BTC.
What makes this even more fascinating is that the final quarter of the year has historically been bullish, especially during halving cycles. For example, in Q4 of 2012, Bitcoin surged by 97.7%, Q4 of 2016 saw gains of 58.4%, and Q4 of 2020 boasted an impressive 168.9% rally.
If historical trends hold true, Q4 of 2024 could mirror this pattern, with October acting as a catalyst for a significant rally.
Political climate
The 2024 U.S. election is adding momentum to Bitcoin’s narrative, with both major candidates entering the crypto dialogue.
Former President Donald Trump, previously skeptical about crypto, has shifted his stance. Earlier this year, in May, he began accepting cryptocurrency donations for his campaign — a move that resonated within the crypto community.
In June, Trump further solidified his pro-crypto position by supporting Bitcoin miners and expressing desire for domestic mining of the remaining Bitcoin supply.
He went further, making headlines in late July as a keynote speaker at the Bitcoin Conference in Nashville, where he proposed establishing a national Bitcoin strategic reserve.
Moreover, on September 16, Trump unveiled his decentralized finance initiative named “World Liberty Financial,” indicating his growing engagement with the crypto sphere.
Conversely, Vice President Kamala Harris has also begun reaching out to the crypto community, albeit with more caution. After a lengthy period of silence, her recent statements indicate a warming toward the sector.
During a recent address in Pittsburgh, Harris emphasized the necessity for the U.S. to remain dominant in blockchain technology, a crucial foundation of the crypto ecosystem.
Following her speech, her campaign released a policy document pledging to “encourage innovative technologies like AI and digital assets,” signaling recognition of the significance of cryptocurrencies like Bitcoin.
With both candidates now engaging in crypto discussions, the political climate appears to be turning favorable for Bitcoin as election season intensifies.
Stable economic environment
The broader economic landscape also plays a pivotal role in Bitcoin’s outlook for October. Despite some mixed signals, there are grounds for optimism.
In August, the U.S. economy saw the addition of 142,000 jobs, slightly exceeding the numbers from July, which has bolstered market confidence. Nonetheless, revisions to previous months’ job data suggest the labor market may not be as robust as initially perceived.
Inflation, a vital factor, seems to be tapering — or at least on the surface. August registered the lowest Consumer Price Index (CPI) since February 2021, sitting at 2.5% year-over-year, just below the anticipated 2.6%.
Conversely, core inflation, which excludes volatile categories such as food and energy, has remained persistently elevated, coming in at 0.3% for August, exceeding forecasts.
Consequently, the Federal Reserve made a significant decision on September 18, lowering interest rates by 50 basis points to a range of 4.75-5%. This has introduced new liquidity into the market.
Simultaneously, China has commenced measures to invigorate its economy. On Sep. 27, Chinese stocks soared to their best weekly performance since 2008, credited to a stimulus initiative from the Chinese government.
The People’s Bank of China announced a lending pool valued at 800 billion yuan ($114 billion) to support local businesses and non-bank financial institutions. This capital influx has enhanced investor confidence globally, creating a more stable environment for risk assets such as Bitcoin.
However, challenges remain on the geopolitical front. Tensions are escalating in the Middle East, especially as the Israel-Palestine conflict nears its one-year anniversary.
Rising strife between Israel and neighboring nations, including the threat posed by Iran-backed Hezbollah, could inject uncertainty into global markets.
While Bitcoin is often viewed as a hedge against traditional market volatility, any significant geopolitical event might temper the prevailing bullish sentiment, complicating what has otherwise been a favorable climate for BTC.
Expert opinions
As Bitcoin enters October, numerous crypto experts and macro analysts are offering insights on potential developments in the near future.
One significant focus among analysts is the increase in global liquidity, a crucial driver for Bitcoin. Julien Bittel, Head of Macro Research at Global Macro Investor, highlights the resurgence of global money supply (M2), which historically serves as a positive indicator for Bitcoin.
He states that Bitcoin usually reacts swiftly to such liquidity injections and that, given the current macroeconomic backdrop, we may be approaching what he describes as a “last-chance opportunity to go long before The Banana Zone commences.”
However, it is essential to note that while liquidity is generally favorable for Bitcoin, geopolitical tensions in the Middle East and the potential for unforeseen economic challenges—reminiscent of COVID—could disrupt this trend.
Another prominent crypto analyst, Michaël van de Poppe has set an exceedingly optimistic target for Bitcoin, predicting it might reach between $90,000 and $100,000 by the end of 2024.
Similar to Bittel, van de Poppe points to the increasing global liquidity as a significant contributing factor. With gold and silver prices climbing to multi-year highs, Bitcoin — often dubbed “digital gold” — is anticipated to follow suit.
Nonetheless, The Kobeissi Letter reports that American consumer sentiment regarding the economic outlook is deteriorating. In fact, general confidence in the economy has decreased to its lowest point since 2020, reflecting levels akin to those seen during the 2008 Financial Crisis.
Historically, whenever the gap between consumers’ current assessments and their future expectations surpasses 30 points, a recession typically ensues, with 2003 being the sole exception.
Currently, we find ourselves at that crucial 30-point threshold once again. This suggests that while Bitcoin may be poised for a bull run, the broader economy could be on the brink of a recession.
If a recession does occur, it could have mixed repercussions for Bitcoin.
On one hand, Bitcoin is frequently regarded as a safe-haven asset during periods of economic uncertainty, potentially increasing demand. On the other hand, a significant economic downturn could diminish risk-taking behavior among investors, possibly constraining Bitcoin’s growth prospects.
Looking forward
As Bitcoin enters October with a bullish outlook, the scene appears promising for potential gains. Nonetheless, caution is vital.
While the rising global liquidity and the post-halving momentum hint at strong upside potential, underlying risks remain. Geopolitical conflicts, alongside the possibility of a recession in the U.S., present significant hurdles.
It’s crucial to remember that the crypto market is notably volatile. Although the future seems bright, Bitcoin’s journey may not be smooth. Always be wary and never invest more than you can afford to lose during these uncertain times.
Disclosure: This article is not intended as investment advice. The content and materials provided on this page are purely for educational purposes.
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