Is “Uptober” making a comeback?

Could Bitcoin’s historic “Uptober” comebacks be repeated this year, especially after its best-ever performance in September, or are we ready for another shift in Bitcoin’s price action?

October brings back hope

As October approaches, the Bitcoin (BTC) community is buzzing with excitement. Historically, this has been Bitcoin’s favorite time to shine, and the buzzword ‘Uptober’ is making a comeback.

But let’s rewind a bit and talk about September. Traditionally, this has been a tough month for Bitcoin, with prices frequently taking a hit. In fact, every September from 2017 to 2022 ended in the red for Bitcoin. It was consistently one of the worst performing months for BTC in years.

But 2024 had other plans. Instead of stumbling, Bitcoin is on the rise! For the first time in years, September ended with a 9.3% return; Bitcoin’s best performance since its inception, according to Coinglass data.

To put this in perspective, BTC only gained 3.91% in September last year. Bitcoin is trading at $64,600 as of September 30, up nearly 2% in the past week.

Much of this momentum comes from the US Federal Reserve’s recent moves. On September 18, the Fed cut interest rates by 50 basis points, giving the market a solid boost.

October has always been a standout month for Bitcoin, with an average return of 22.9%. With BTC already showing strength as we leave September behind, what could be next for Bitcoin?

Factors driving Bitcoin’s October outlook

As we move towards October, several fundamental factors appear to be aligning for Bitcoin, setting the stage for a potentially bullish month. Let’s break these down one by one.

Post-halving effect

Bitcoin’s fourth halving event took place in April 2024, with mining rewards halving from 6.25 BTC to 3,125 BTC per block.

Historically, this supply reduction has often, if not immediately, led to bullish price movements. Bitcoin tends to follow a post-halving pattern, oscillating between highs and lows before gaining significant momentum.

Interestingly, research shows that Bitcoin’s price cycles begin to gain momentum around 170 days after the halving and peak around 480 days later.

Even though it has been nearly 170 days since October’s last halving, many think this could be the start of a major upward move for BTC.

What makes this even more interesting is the fact that the last quarter of the year has historically been bullish, especially during halving cycles. For example, in the 4th quarter of 2012 Bitcoin rose 97.7%, the 4th quarter of 2016 saw a 58.4% gain, and the 4th quarter of 2020 saw a staggering 168.9% rise.

If history is any indication, Q4 2024 could follow this pattern, with October potentially setting the stage for a strong rally.

election heat

The 2024 US election race is adding fuel to Bitcoin fire, with both major candidates entering the crypto debate.

Former President Donald Trump, once a crypto skeptic, has made a critical comeback. Earlier this year, in May, he started accepting crypto donations for his campaign, which immediately caught the attention of the crypto community.

In June, Trump further strengthened his pro-crypto stance by voicing his support for Bitcoin miners and the hope that the remaining Bitcoin supply would be mined domestically.

He didn’t stop there. At the end of July, Trump made headlines by attending the Bitcoin Conference in Nashville as the main guest, where he proposed creating a national strategic Bitcoin reserve.

And, to cap things off, on September 16, Trump launched his own decentralized finance project called “World Liberty Financial,” solidifying his deepening involvement in the crypto space.

On the other hand, Vice President Kamala Harris has also begun courting the crypto community, although she is more cautious. After a long silence, he is finally making statements showing that he has warmed up to the industry.

In a recent speech in Pittsburgh, Harris emphasized the importance of maintaining US dominance in blockchain technology, the critical backbone of the crypto ecosystem.

He followed up his campaign by releasing a policy document promising to “promote innovative technologies such as Artificial Intelligence and digital assets,” pointing to the importance of cryptocurrencies such as Bitcoin.

With both major candidates now diving into the crypto waters, the political landscape appears to be shaping up positively for Bitcoin, especially as the election season heats up.

Stable macroeconomic environment

The macroeconomic environment also plays an important role in Bitcoin’s October outlook. Despite some mixed signals, there are reasons to remain optimistic.

The US economy added 142,000 jobs in August; This is slightly more than in July, which increased market confidence. But job revisions in previous months suggest the labor market may not be as strong as it initially seemed.

Another critical factor, inflation, appears to be cooling, at least superficially. In August, the Consumer Price Index (CPI) hit its lowest level since February 2021, falling to 2.5% on a 12-month basis, just below the expected 2.6%.

However, core inflation, which excludes variable items such as food and energy, remains stubbornly high, coming in at 0.3% in August, above expectations.

As a result, the Federal Reserve made a historic move on September 18, reducing interest rates by 50 basis points to the range of 4.75-5%. This injected fresh liquidity into the financial system.

Meanwhile, on the global stage, China has taken steps to revitalize its economy. On September 27, Chinese stocks had their best week since 2008, thanks to the stimulus package implemented by Beijing.

The People’s Bank of China announced a loan pool of 800 billion yuan ($114 billion) to support local companies and non-bank financial institutions. This influx of capital has increased the confidence of investors around the world and created a more stable base for risky assets such as Bitcoin.

But all is not well on the geopolitical front. Tensions continue to rise in the Middle East, especially as we approach the first year of the Israeli-Palestinian conflict.

Increasing friction between Israel and regional countries, including the potential threat from Iran-backed Hezbollah, could create uncertainty in global markets.

While Bitcoin is often viewed as a hedge against traditional financial volatility, any harsh geopolitical event could dampen the ongoing uptrend and complicate an otherwise positive situation for BTC.

What do experts think?

As Bitcoin enters October, many crypto experts and macro analysts are weighing in on what could happen in the coming days.

One of the main themes analysts focus on is the increase in global liquidity, which is a major driver for Bitcoin. Julien Bittel, Head of Macro Research at Global Macro Investor, states that the global money supply (M2) has started to rise again and this is a historically positive sign for Bitcoin.

As you know, we expected Global M2 to rise.

Well, now this has happened…

We also closely monitor our GMI Weekly Global Liquidity Index, which focuses on public liquidity, particularly central bank balance sheets in terms of net liquidity. pic.twitter.com/z1C2vdbL9P

— Julien Bittel, CFA (@BittelJulien) September 25, 2024

He suggests that Bitcoin tends to react quickly to such liquidity injections, and given the current macro environment, we may be approaching what he calls a “last chance parlor to go long before the Banana Zone really kicks in.”

However, while liquidity for Bitcoin is trending upward, it is important to note that geopolitical tensions in the Middle East and the possibility of unexpected economic shocks (like those seen during COVID) could disrupt this momentum.

Another prominent crypto analyst, Michaël van de Poppe, set an extremely bullish target for Bitcoin. He predicts that by the end of 2024, Bitcoin could trade between $90,000 and $100,000.

While gold continues its rise, silver reached its highest price level in the last decade.

Global liquidity is increasing significantly and #Altcoins I barely started.

We’ll probably see it before the end of the year #Bitcoin It trades between $90,000-$100,000.

— Michaël van de Poppe (@CryptoMichNL) September 26, 2024

Like Bittel, van de Poppe cites increased global liquidity as an important factor. As gold and silver prices climb to multi-year highs, Bitcoin, often referred to as “digital gold,” is expected to do the same.

But U.S. consumers are becoming increasingly pessimistic about the economic outlook, according to The Kobeissi Letter. In fact, Americans’ confidence in current economic conditions has fallen to its lowest level since 2020, mirroring levels seen during the 2008 Financial Crisis.

US consumers believe the economy is in recession:

Americans’ assessment of current economic conditions has reached its lowest level since 2020.

This is also consistent with levels seen during the 2008 Financial Crisis.

Whatever the difference in the last 50 years… pic.twitter.com/v8BIdyxJbu

— Kobeissi Letter (@KobeissiLetter) September 25, 2024

Historically, when the gap between consumers’ current evaluations and future expectations exceeds 30 points, a recession has often followed; The only exception was 2003.

Now we are at that critical 30+ point point again. This means that while Bitcoin is preparing for a bull run, the broader economy may be on the brink of recession.

If a recession occurs, it could have mixed consequences for Bitcoin.

On the one hand, Bitcoin is often seen as a safe haven asset that can boost demand during economic uncertainty. On the other hand, a serious economic crisis could dampen investors’ risk appetite and potentially limit Bitcoin’s rise.

The road ahead

As Bitcoin enters October with bullish momentum, the environment seems set for potential gains. However, it is very important to tread carefully.

Although increased global liquidity and the post-halving cycle indicate strong upside potential, risks still remain. Geopolitical tensions, coupled with the possibility of the United States falling into recession, remain key challenges.

It is always wise to remember that the crypto market is highly volatile. While the future looks promising, Bitcoin’s path may be rocky. As always, never invest more than you can afford to lose and proceed with caution in these uncertain times.

Disclosure: This article does not constitute investment advice. The content and materials on this page are for educational purposes only.