The most anticipated month of the year for Bitcoin is upon us. October has historically been the apex cryptocurrency’s favorite time to surge, a period traders fondly call “Uptober”.
Before learning about the perks of October, we need to look back on last month. September has traditionally been one of the roughest months for Bitcoin in comparison, with prices generally taking a major hit. From 2017 to 2022, every September saw Bitcoin ending up in the red zone. For years it has consistently been the worst-performing month for Bitcoin’s price.
Bitcoin Enters October With Best September Price Performance Since Its Inception
However, in 2024, things changed. Instead of prices tumbling, Bitcoin surged in value. For the first time in five years, BTC ended September with a return of 9.3%, which according to Coinglass data is the best September performance since the cryptocurrency’s inception.
For comparison, Bitcoin only managed to rise 3.91% in September 2023. Meanwhile, the cryptocurrency climbed 2% over the past week to trade at $64,600 on September 30, 2024.
A lot of this positive momentum was driven by the US Federal Reserve’s decision to cut borrowing interest rates on the dollar by 50 basis points (BP). On September 18, the central bank cut interest rates for the first time since 2020, giving the broader market a much-needed boost.
Meanwhile, October has always been a stellar month for Bitcoin’s prospects, managing an average return of 22.9%. As the market delves into “Uptober”, there are several key factors that are setting the stage for a potentially bullish month.
October Marks 170 Days Since The Latest Halving Event, Indicating A Major Bull Run
In April, the Bitcoin network slashed its mining rewards in half from 6.25 BTC per block to 3.125 BTC. Even though it takes a while, this reduction in supply often sparks bullish movements. Bitcoin generally follows a specific post-halving pattern, moving back and forth between highs and lows before building key momentum.
Bitcoin’s price cycle typically starts gaining traction around 170 days after a halving, peaking 480 days later. October marks about 170 days since the latest halving event, and the market is speculating that this could be the beginning of a major upward movement for BTC.
Historically, the last quarter of the year during a halving cycle has been bullish. In the first halving cycle in 2012, Bitcoin surged 97.7% by the fourth quarter. This was followed by a 58.4% gain in Q4 2016, the second halving cycle, and an astonishing 168.9% rally in Q4 2020 during the third halving cycle.
If this trend continues, then October could potentially set the stage for Q4 2024 to produce a strong rally.
US President Elects’ Support For Bitcoin Could Be Key
Another important event adding fuel to Bitcoin’s fire is the 2024 US Presidential election, where both candidates have made cryptocurrency a focal point of their campaign.
Donald Trump, former President and leading candidate for the White House, has gone from a crypto skeptic to its strongest supporter. In May, his campaign officially began accepting donations in crypto, which quickly caught the community’s attention. Two months later, the billionaire real estate mogul reinforced his pro-crypto stance by announcing support for American Bitcoin miners, expressing hope that all the remaining supply of Bitcoin would be mined in the country.
In July, Trump attended the Bitcoin 2024 Conference in Nashville, where he proposed creating a national Bitcoin strategic reserve. Last month, he launched his decentralized finance (DeFi) project called “World Liberty Financial”, further solidifying his involvement in the crypto space.
On the other end, Vice President Kamala Harris has also begun courting the crypto community. While remaining silent on the matter for most of her campaign, she is finally starting to make statements in support of the industry. During her recent speech in Pittsburg, Harris highlighted the importance of maintaining America’s dominance in the blockchain sector. Later, her campaign released a policy document promising to encourage innovative technologies like AI and crypto assets.
With both parties’ candidates actively supporting cryptocurrency and blockchain technology, the political landscape is shaping up favorably for Bitcoin.
Cooling Inflation And Increased Global Money Supply Could Propel Bitcoin’s Price
Despite some mixed signals, a stable macroeconomic environment is giving an optimistic outlook for Bitcoin in October. In August, the US added 142,000 new jobs to the economy, boosting market confidence. However, the job revisions from previous months have weakened the country’s labor market.
Inflation, which is a key factor in deciding the market’s health, seems to be cooling. In August, the consumer price index (CPI) hit its lowest level since February 2021, landing at 2.5%, below the expected rate of 2.6%. Despite the breather, core inflation, which excludes volatile items like food and energy, rose 0.3% last month, higher than previously anticipated.
The reduction in inflation was critical in the Federal Reserve’s historic move to cut interest rates by 50 BPs, bringing it down to a range of 4.75-5%. This resulted in the injection of fresh liquidity into the financial markets.
Industry experts and analysts are weighing in on a surge in global monetary liquidity, which is a key driver of Bitcoin’s price. Julien Bittle, head of macro research at Global Macro Investor, highlighted that the global money supply (M2) has started to rise again, which has historically been a positive signal for BTC.
Bittle suggests that Bitcoin tends to react quickly to such liquidity injections, and given the current macro environment, he says the market may be nearing a “last-chance saloon” to go long. While liquidity remains bullish for the cryptocurrency, geopolitical tensions in the Middle East and Europe could result in unexpected economic shocks, which could disrupt the October momentum.
Analyst Predicts Bitcoin To Trade Between $90,000 And $100,000 By The End Of The Year
Promine crypto analyst Michael van de Poppe predicts that Bitcoin could trade anywhere between $90,000 and $100,000 by the end of 2024. His bullish assumption is based on the growing global liquidity, which has pushed the price of gold and silver to multi-year highs. He expects BTC, often called “digital gold”, to follow suit and target a new all-time high.
While rising global liquidity, lowering inflation and interest rates, and post-halving cycle suggest a strong upside potential for Bitcoin, there is still the looming risk of geopolitical tensions escalating and the possibility of a recession in the US, which are key challenges.
At the time of writing, Bitcoin (BTC) is trading at $63,809 – up 0.70% over the last 24 hours.
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