Historical October gains reverse for Bitcoin
Bitcoin just experienced what might be its worst October performance in recent memory. The cryptocurrency, which started the month strong with a fresh all-time high around $126,080 on October 6, ended up sinking to levels not seen in four months. By the end of the month, Bitcoin was trading around $109,820—down about 13% from its peak and showing an overall monthly decline of 3.69%.
This breaks a six-year streak of positive October returns for Bitcoin. Historically, October has been one of Bitcoin’s strongest months, earning it the nickname “Uptober” among traders. Data from CoinGlass shows that over the previous ten years, Bitcoin only recorded one losing October back in 2018. The average October return has been nearly 20%, with last year bringing an 11% gain and 2023 delivering an impressive 29% increase.
Macroeconomic pressures weigh heavily
The downturn came amid some unsettling macroeconomic conditions that seemed to catch many investors off guard. Federal Reserve Chair Jerome Powell’s comments that a third interest rate cut was “not a foregone conclusion” sent digital assets into what felt like a tailspin. Bitcoin briefly dropped below $106,000 at one point during the selloff.
Earlier in October, things got shaky when former President Donald Trump re-escalated trade tensions with China. That move raised concerns about the global economy and triggered massive liquidations—investors closed more than $19 billion in positions, with nearly 90% of those being long positions betting on price increases.
Market structure and sentiment factors
Juan Leon, Bitwise Senior Investment Strategist, pointed to three main factors behind the negative performance: “a powerful macroeconomic shock, fragile internal market structure, and a subsequent lukewarm monetary policy signal.” He noted that the October 11 crash had lingering effects on market psychology.
Analyst Noelle Acheson observed in her newsletter that “the reset of rate cut expectations” continued to pressure crypto prices. She made an interesting point about Bitcoin’s sensitivity to liquidity conditions compared to other assets. “Equities have earnings and other factors impacting their appeal, and bonds have fiscal and economic growth,” she wrote. “BTC doesn’t, it’s pure sentiment, which in the short-term is affected by monetary liquidity.”
Long-term holder behavior and cycle theories
There’s also been increased selling by long-term Bitcoin holders, possibly tied to beliefs that Bitcoin had reached a peak in its latest four-year cycle. Acheson noted that “if you still believe in the BTC four-year cycle, then we’re at the peak if you map previous cycle patterns.” This thinking might be influencing some of the selling pressure from veteran investors.
Still, not everyone is pessimistic. Grayscale’s Head of Research Zach Pandl remains optimistic about the market’s prospects, pointing to the potential approval of multiple crypto exchange-traded funds by the SEC and favorable regulatory developments. “With bipartisan market structure legislation back on track and several altcoin exchange-traded products set to launch, we expect that the crypto market setback will be short-lived,” he told Decrypt.
As November begins, traders are watching to see if history repeats itself. Last November brought a 37% price spike for Bitcoin—something that would certainly help erase the memory of this disappointing October.
