‘Uptober’ rally questioned as crypto markets turn red nine days out

Crypto pundits are debating whether there will be a crypto rally in October — just 10 days away — after the markets went in an opposite direction on Monday. 

Historically, October has been one of the most reliably positive months for Bitcoin (BTC $112,930), shooting into the green 10 out of 12 times since 2013, according to CoinGlass, earning it the moniker “Uptober.”

The asset has not seen a loss in October since 2018, when it declined 3.8%. In the bull market years of 2017 and 2021, Bitcoin gained 48% and 40% respectively, in October. 

A similar surge this bull market year could see it jump to around $165,000 next month from current levels. 

On Monday, Bitcoiner Kyle Chassé said there has been an increase in odds of another Federal Reserve rate cut next month — which are currently at 92% according to CME futures predictions — stating that the “easing cycle is basically priced in” and liquidity is on the way, which is “the fuel Bitcoin and crypto thrive on.”

Analyst ‘Sykodelic’ predicted on Monday that markets would sink lower before surging in October.

“As I’ve been saying for a wee while, $112,500 is the number, and when we get there, we will see the usual suspects calling for rate cuts being bearish and market topping,” they said, adding: 

After we get this over with, it’s 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 said crypto will hit a “up only mode” once the US Treasury hits a target goal of filling the Treasury General Account after it surged past $850 billion earlier this month. “With this liquidity drain complete, up only can resume,” he said on X on Saturday.

10 out of 12 Octobers have been bullish. Source: CoinGlass

Others see a more muted crypto rally

However, some analysts cautioned against the euphoria. 

“We expect any BTC rallies to be relatively muted given the extremely low implied volatility and upside skews, weakening DAT inflow momentum, and presence of profit takers still looking to sell to cap upside,” said Augustine Fan, head of insights at crypto trading software service provider SignalPlus, adding: 

“Longer-term investors will have to be more patient before we expect new ATHs to be reached.”

Meanwhile, the chief operating officer at the BTSE exchange, Jeff Mei, said, “We think 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.”

If the Fed indicates more aggressive measures to stimulate the economy, however, this could change.

Crypto markets turned red on Monday 

The crypto markets started to retreat on Monday morning, with total capitalization sinking by $80 billion over the past few hours as Bitcoin fell to a twelve-day low of $114,270. 

Ether (ETH $4,193) also took a hit, dropping more than 4% in a dip below $4,300, its lowest level for a fortnight.