Bitcoin (BTC)'s normally strong performance in October was threatened by high open interest in futures contracts and flat buying activity by spot investors, according to the September 30 edition of the Bitfinex Alpha report. It is said that there is.
The report highlighted that since 2013, October has consistently delivered strong results for Bitcoin, with an average return of 22.9% and a median return of 27.7%.
As a result, the industry refers to this trend as an “uptober,” which typically follows a longer upward trend through the fourth quarter, with the market posting an average return of 88.8% over the period.
Bullish signs for “Uptober”
According to the report, the possibility of a Fed rate cut is also increasing optimism as Bitcoin enters the final quarter of the year.
Notably, Federal Reserve Chairman Jerome Powell said in his September 30 keynote speech at the National Association for Business Economics that we should expect another 50 basis point rate cut this year.
Adding to the bullish mood, Bitcoin has risen 26.2% to $52,756 since its sharp correction on September 6th, breaking through the $65,000 mark and hitting its local high on August 25th. It exceeded $65,200. This is the first time since March that Bitcoin has surpassed its local all-time high.
Additionally, Bitcoin’s consolidation between $50,000 and $68,000 mirrors the pattern seen before the 2020 halving, when the October rally led to a significant price increase.
warning sign
Despite various optimistic signs related to a potentially bullish fourth quarter, the report also highlighted some warning signs that still threaten Bitcoin's performance.
The first sign is that active buying in the spot market is leveling off. Since September 6th, spot investors have been accumulating large amounts of BTC, but this activity has weakened since last week.
This suggests a temporary balance in the market between buyers and sellers, which is related to a lack of interest from traders who do not want to make aggressive moves by the fourth quarter. Possibly.
The second sign concerns Bitcoin futures, which recorded $35.3 billion in open interest. The report said this level is often associated with peaks in the local market, raising concerns about potential “overheating” of the market.
Nevertheless, Bitfinex analysts believe that a 5% to 10% decline is enough to cool the market and won't stop Bitcoin's recent upward trend.
