Bitcoin (BTC) has been defying historical trends this September, often known as the “September Effect,” by posting positive gains. Investors are now eagerly anticipating the upcoming month of October, often referred to as “Uptober” due to its historically favorable performance.
Data from CoinGlass, retrieved by Finbold on September 25, shows that Bitcoin has already gained nearly 8% this month. In contrast, October has seen average and median returns of 22.9% and 27.7% respectively since 2013, highlighting why it is deemed a positive month, while September typically records negative returns.
Looking back at previous years, in 2023, Bitcoin gained 28.52% in Uptober following a 3.91% decline in September. The cryptocurrency has experienced only two losing Octobers in its history: in 2014 with a 12.95% drop and in 2018 with a 3.83% decrease.
Despite the positive outlook for Bitcoin, there is still significant liquidity to the downside due to a growing bullish sentiment among long-position traders. Before Uptober kicks off, it is crucial for Bitcoin to clear these positions held by retail traders, as whales and institutional traders need sufficient liquidity to profit, often going against prevailing market trends.
The market’s focus is on three key liquidity points highlighted in a two-week liquidation heatmap, with levels at $62,000 and $57,000 presenting possible targets for significant players. While Bitcoin could transition into “Uptober mode” without clearing these levels, the strong liquidity pools act as magnets, suggesting a potential downward move to liquidate long positions before any upward momentum.
Technical analysis indicates that Bitcoin, currently trading at $63,380, may be poised for a downside move despite showing short-term upward trajectory with higher lows and highs over the past week. Analysts are warning of the likelihood of lower prices in the short term before Bitcoin can enter a full bullish phase.
Some experts predict that a major correction may occur before Bitcoin is truly ready for Uptober. However, optimism remains for altcoins, with an anticipated “altseason” on the horizon as mid and small-cap coins show signs of breaking out of a downtrend.
In conclusion, Bitcoin could see further corrections before establishing a path for sustained growth in October, aiming to uphold its historical positive performance and potentially celebrating yet another successful Uptober in the coming year.