As of this writing, Bitcoin has surged 8.7% in September, breaking a historically bearish trend.
Expectations are high for a massive rebound in October, echoing Uptober’s sentiment.
According to our data, Bitcoin (BTC) has surged 8.7% over the past month, defying its historically bearish trend in September. The rise in Bitcoin prices sets the stage for a generally bullish October for the leading digital asset. Some market participants are even predicting a price target of $70,000 for BTC in the coming weeks from the current $64,000 level.
The impact of seasonality on BTC prices
Seasonality refers to the tendency of an asset to experience recurring, regular, and predictable changes over a calendar year. While it may appear random, it could be the result of a price crash due to profit-taking during the tax season in April and May. Additionally, the typically optimistic “Santa Claus” rally in December could indicate increased demand.
September is historically a weak month for Bitcoin. Since 2013, Bitcoin has closed in the red eight times in a row. As previously reported, the average value burn rate in September is 6.56%. Therefore, traders are usually defensive about betting on a rise in Bitcoin prices in September.
Compared to September, there have been only two Octobers since 2013 where Bitcoin closed with a loss. Bitcoin’s gains were as high as 54%, with an average gain of 22%. That is, the current Bitcoin market trend in September this year seems to be different from the past.
Bitcoin is now trading in the green, reacting positively to multiple global monetary easing policies such as China’s announcement of a massive stimulus package. As CNF mentioned before, other factors include the Fed’s 50 basis point rate cut and increased institutional investment in Bitcoin. In addition, the increased interest in Bitcoin from US political parties also influenced the price action ahead of the November election.
According to previous trends, Bitcoin has been closing higher in October, November and December. Market experts expect this to continue this year. Augustine Fan, head of insights at SOFA, commented:
As crypto’s correlation with macro assets remains high, especially relative to SPX, we believe the friendly macro backdrop remains a strong driver for crypto prices heading into Q4.
What to expect from Bitcoin in October
As of writing, BTC is trading at $64,775, up 0.6% in 24 hours. Trading volume has surged 72% to over $24 billion over the same period, indicating renewed interest among investors.
Surprisingly, BTC has achieved its first three-week gain since February. Traders buying call options that offer asymmetric upside potential above $75,000 has been the main driver of the surge. As prices rose, traders saw a large amount of call buying activity with strike prices of $75,000 and above on cryptocurrency exchange Deribit, according to order flow tracked by Amberdata.
“The flow pattern suggests a bullish outlook for spot prices (due to put option selling),” said Greg Magadini, director of derivatives at Amberdata. At the same time, he predicts that the price movement will accelerate.
