Despite getting off to a strong start and hitting a new record high in early October, the anticipated “uptober” turned out to be a negative factor. Bitcoinmajor cryptocurrencies have fallen to untouched levels for four months.
bitcoin price According to CoinGecko, the recent price per coin was $109,820, about 13% below the October 6th record of $126,080. The asset fell more than 8% in 30 days.
October has historically been one of Bitcoin’s strongest months, hence the nickname “Uptober,” and as of 2018, it had experienced just one down month in the past decade, according to data from CoinGlass. This October marked the sixth consecutive year of increases, with a decline of 3.69% from the beginning of the month to the end of the month.
Bitcoin’s sharp decline in a historically strong month comes amid volatile macroeconomic conditions, most recently due to liquidity concerns and diminishing prospects for a third interest rate cut that investors have been waiting for.
On Wednesday, US central bank chairman Jerome Powell said the cuts were “not a foregone conclusion” and digital assets were hit hard, with the largest cryptocurrency by market capitalization at one point falling below $106,000.
Bitcoin and other risk-on assets were on the decline earlier this month after US President Donald Trump re-escalated his trade war with China and raised concerns about the global economy. investor liquidated more than $19 billion We hold positions, approximately 90% of which are long positions in the hope that prices will rise.
“October’s negative returns can be attributed to the confluence of three key factors: strong macroeconomic shocks, weak internal market structures, and subsequent lukewarm monetary policy signals,” said Juan Leon, senior investment strategist at Bitwise. decryptionHe added that the October 11 crash had a long-term impact on the market.
inside her Cryptography is now a macro In a newsletter on Friday, analyst Noel Acheson wrote that the “resetting of interest rate cut expectations” continues to “weigh on crypto prices.”
“As Chairman Powell recognized “Liquidity conditions are tight,” Acheson said in a statement. “Although we have not yet reached crisis levels as a percentage of bank reserves, Bitcoin is one of the most sensitive assets to liquidity conditions.”
He added: “Stocks have earnings and other factors that affect their attractiveness, bonds have financial and economic growth. Bitcoin doesn’t. It’s pure sentiment, influenced by financial liquidity in the short term and the balance of supply and demand in the long term.”
Earlier this week, in a telegram exchange with decryptionshe also noted increased selling by long-term holders, perhaps related to the belief that Bitcoin has peaked in the most recent four-year cycle that has defined the rhythm of the crypto market.
“If you still believe in BTC’s 4-year cycle (and many old-timers probably do too), if you map the previous cycle pattern we will have reached the peak,” she wrote.
Bitcoin, cryptocurrencies, and stocks typically perform well in low interest rate environments. FRB I cut it Interest rates at the last two meetings.
Bitcoin rose nearly 11% last October and rose almost 29% in October 2023. Back in 2021, it rose a whopping 40% in the same month. According to CoinGlass, on average, digital coins offer investors an average return of nearly 20%.
“This feels like one of the weakest ‘uptober’ performances in recent years, driven primarily by selling during US time rather than the result of a single widespread decline,” said Martun, an analyst under the pseudonym CryptoQuant. decryption. they paid attention Other factors include tariffs on China and economic indicators such as unemployment data, the Consumer Price Index and the Producer Price Index, which have taken a less favorable turn in recent months.
Still, some analysts are optimistic. Zach Pandl, head of research at Grayscale, said: decryption It notes that the long list of crypto exchange-traded funds expected to be approved by the SEC could help the market, and that the regulatory environment remains favorable for digital assets.
“With the bipartisan market structure bill back on track and the planned launch of several altcoin exchange-traded products, we do not expect the crypto market downturn to last long,” he said.
So, will Bitcoin become a “Moonvember”? Last year, the 11th month saw the price of BTC surge by a staggering 37%. Investors will definitely appreciate seeing this again.
