Historical October Streak Broken
October has typically been a strong month for Bitcoin, earning the nickname “Uptober” among traders. For the past six years straight, Bitcoin had posted gains during this month. But this year broke that pattern with a 3.69% decline from start to finish. That might not sound like much, but when you consider Bitcoin’s historical October average of nearly 20% returns, it’s quite a departure from the norm.
Looking back at the data, October has only shown a monthly loss once in the previous ten years, back in 2018. This makes the current performance particularly notable. Bitcoin climbed nearly 11% last October, almost 29% in October 2023, and a massive 40% back in 2021. So this year’s drop feels more significant when you put it in context.
Macroeconomic Pressures Mount
The decline came amid some unsettling economic conditions. Federal Reserve Chair Jerome Powell’s comments really seemed to shake things up. When he said that another interest rate cut was “not a foregone conclusion,” digital assets took a noticeable hit. Bitcoin dropped below $106,000 at one point, which was quite a move from its October 6 record of $126,080.
Earlier in the month, there was also that trade war escalation between the U.S. and China. That triggered a broader sell-off across risk assets. Investors liquidated more than $19 billion in positions, with nearly 90% of those being long positions expecting price increases. It created a fragile market structure that seemed to amplify the downward pressure.
Analyst Perspectives on the Drop
Juan Leon from Bitwise pointed to three main factors behind the negative returns: a powerful macroeconomic shock, that fragile internal market structure I mentioned, and then what he called a “lukewarm monetary policy signal.” He noted that the October 11 crash had lingering effects on market sentiment.
Noelle Acheson made an interesting observation about Bitcoin’s sensitivity to liquidity conditions. She wrote that while equities have earnings and other factors supporting them, and bonds have fiscal and economic growth dynamics, Bitcoin is more purely driven by sentiment. In the short term, that sentiment gets heavily influenced by monetary liquidity.
There’s also been increased selling by long-term holders recently. Some analysts think this might be tied to the belief that Bitcoin has reached a peak in its current four-year cycle. If you still follow that traditional cycle pattern, we might be at the top.
Looking Ahead to November
Despite the October disappointment, some analysts remain optimistic. Zach Pandl from Grayscale mentioned that the expected approval of several crypto exchange-traded funds could provide support. He also noted that bipartisan market structure legislation appears to be back on track, which could create a more favorable regulatory environment.
Last November brought a 37% price spike for Bitcoin, so traders are naturally wondering if we might see a “Moonvember” this year. The market setback might be short-lived, but it’s hard to say for certain. What’s clear is that Bitcoin’s relationship with macroeconomic factors and liquidity conditions continues to be a dominant theme driving price action.
