Despite a significant liquidation event last week, analysts and experts believe that the crypto markets are still poised for a bullish October, drawing comparisons to previous black swan events in the crypto space.
“After the largest liquidation in crypto history, I anticipated October would see significant losses,” crypto podcaster Scott Melker stated on Wednesday.
However, Melker remarked that the markets are maintaining their strength, “which honestly feels like a small miracle,” and added, “I don’t believe we’re entering a bear market.”
Following the weekend downturn, the crypto market capitalization quickly rebounded to reclaim $4 trillion but has since slightly cooled off as Bitcoin (BTC) struggled to maintain its upward momentum, retreating below $111,000 again on Tuesday.
Melker pointed out that this situation differs from 2017 or 2021, when external factors like “ICO mania, China mining ban, or FTX” heavily influenced markets.
“What occurred last week was purely structural. It was an event that compelled everyone to pause, reassess risk, and reconsider what’s actually feasible (and flawed) in this market.”
Expect Near-term Volatility
HashKey Group senior researcher Tim Sun conveyed to Cointelegraph that the road to the cycle’s peak is likely to be bumpy.
“In the wake of last weekend’s aggressive deleveraging, the market sentiment remains subdued, and overall risk appetite is low. Price movements are particularly sensitive to headline-driven events.”
“Volatility in the near term is to be expected, but excessive pessimism is unwarranted,” he said, emphasizing that from a medium- to long-term perspective, “liquidity repair, policy easing, and de-escalation of tensions should remain the key themes.”
Seasonal Patterns Matter
October has earned the nickname “Uptober” as Bitcoin has registered gains in the month in ten of the last 12 years. Currently, it is down 0.6% since the beginning of the month, yet historical trends suggest it could still end positively.
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Historically, Bitcoin sees the most significant increases in the latter half of the month. In October 2024, it gained 16% post-Oct. 15, while in 2023, it increased by 29% and in 2020, it rose by 18% in the second half.
Melker also highlighted the impressive rally of gold to an all-time high last week, noting that there typically follows a rotation into Bitcoin.
“Investors aren’t panicking; they’re reallocating. If gold can surge that significantly, consider what happens when capital starts flowing back into Bitcoin.”
Additional Uptober Factors
The trade tariff concerns that contributed to last weekend’s plunge appear to be diminishing, as a White House official confirmed that President Trump and Chinese President Xi Jinping will meet to discuss trade.
“Trade disputes are not a zero-sum game; both parties ultimately pursue larger shares of the benefits, suggesting that the outcome will likely be more moderate than current sentiment indicates,” Sun remarked.
Other narratives, like additional Federal Reserve rate cuts this year and the debasement trade, are also supporting the notion that Uptober is on course.
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