Introduction
Bitcoin is defying its historical October bullish trend, posting a 4% decline this month against its typical 19.84% average return. Failed rallies and sharp price swings indicate the crypto market remains in a correction phase, with analysts questioning whether ‘Uptober’ has been canceled entirely as institutional optimism clashes with macroeconomic headwinds.
Key Points
- Bitcoin is down 4% in October, significantly underperforming its historical 19.84% average return for the month
- Multiple failed attempts to push beyond $113,000 this week indicate weak buying pressure and corrective market conditions
- Analysts attribute the volatility to conflicting forces of institutional adoption optimism versus macroeconomic risks and global liquidity tightening
Historical October Performance Defied
October has traditionally been a bullish month for Bitcoin, with historical data showing an average return of 19.84% for the cryptocurrency. However, this year’s performance has dramatically diverged from this pattern, with Bitcoin currently down 4% for the month according to CoinGlass data. The underperformance extends across the broader crypto market, with Ethereum declining 5% and Solana and other major altcoins experiencing double-digit losses per CoinGecko data.
The deviation from historical norms is particularly striking given Bitcoin’s strong start to the month. In the first week of October, buying pressure pushed Bitcoin from $115,000 to a record high of $126,200, generating optimism among investors. This early momentum has completely reversed, leaving the market questioning whether the seasonal phenomenon dubbed ‘Uptober’ has been effectively canceled for 2024.
Failed Rallies and Technical Weakness
Multiple attempts to push Bitcoin beyond the $113,000 level this week have failed, indicating persistent selling pressure and weak buying interest. The price action has been particularly volatile, with Bitcoin accelerating nearly 5% in less than two hours during the early New York trading session on Tuesday, only to see those gains erased over the next eight hours, leaving the cryptocurrency trading around $108,400.
Technical indicators reinforce the bearish sentiment. Bitcoin currently sits nearly 12% away from its October 10 peak of $122,500 and is trading less than 1% above the 200-day simple moving average, a critical metric used by traders to gauge an asset’s bullish or bearish trend. Julio Moreno, head of research at crypto on-chain data analytics platform CryptoQuant, confirmed the technical weakness, stating that ‘every on-chain metric indicates we remain in a correction period, and price action doesn’t look constructive.’
Market Sentiment Torn Between Competing Forces
The cryptocurrency market finds itself caught between conflicting narratives. On one side, optimism about institutional adoption continues to provide underlying support. On the other, macroeconomic pressures and the escalating U.S.-China trade war have triggered risk aversion among investors. Wenny Cai, Co-Founder and COO at crypto derivatives platform SynFutures, described the situation as a market ‘stuck between optimism over institutional adoption and pessimism driven by tightening global liquidity.’
The sharp intraday swings across Bitcoin, Ethereum, and major altcoins reflect this cautious market sentiment. Cai noted that the volatility represents ‘unsurprising behavior’ given this month’s historic liquidation cascade, which saw significant positions unwound during the October 10 selloff. Both Moreno and Cai agreed that investors may not have recovered from that crash, with Moreno emphasizing that ‘it takes time to reposition again.’
Macroeconomic Headwinds Outweigh Policy Support
Despite supportive monetary policy developments, including the Federal Reserve’s decision to end quantitative tightening and expectations of another quarter-point rate cut, crypto markets continue to struggle. The divergence between crypto and traditional markets has become increasingly apparent, with the S&P 500 having undone its October 10 drawdown and trading close to record highs while crypto assets lag significantly.
Experts point to macroeconomic uncertainty and the spillover effects of the U.S.-China tariff war as the most significant risks for crypto markets. Cai highlighted additional concerns, noting that if prices fall further, it could ‘reveal the fragility of crypto liquidity across exchanges and put Bitcoin miners under additional pressure.’ Both analysts agreed that the near-term outlook for the crypto market appears bleak, with volatility likely to remain the defining feature until macroeconomic factors stabilize.
📎 Related coverage from: decrypt.co