Bitcoin Starts October In The Red After Crash To $61,000, Is ‘Uptober’ A Myth?

Bitcoin started the month of October on a negative note, deviating from what many investors had expected leading up to the month. Bitcoin, which had been on a notable price increase earlier, started to face setbacks as September ended, leading up to the first 24 hours of October.

The first 24 hours of October have been riddled with outflows from the crypto industry. Bitcoin, in particular, fell below $61,000, according to Coinmarketcap, as tensions started to rise in the Middle East. Going by this decline, it has raised questions as to the outlook for Bitcoin in the rest of the month. 

Current Bitcoin Price Action

The buzz leading into October centered around expectations that Bitcoin would extend its bullish momentum and break through key resistance levels. According to price data, Bitcoin ended the month of September 7.11% above where it started, even peaking above $66,000 at one point.

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However, at the time of writing, Bitcoin has fallen by almost 7% from the September peak. Furthermore, Coinmarketcap data shows that Bitcoin has been down by 3.6% in the past 24 hours. The swift downturn has altered the market’s sentiment, with the once-bullish outlook giving way to fear and uncertainty. The Fear and Greed Index, which gauges the market’s emotions and risk appetite, now reads 39 and signals “Fear.” It would seem crypto investors are now panicking, with crypto analyst Kaleo even calling this to attention on social media platform X.

After spending five minutes scrolling through the timeline you’d think we’re never going to see a green candle again

— K A L E O (@CryptoKaleo) October 1, 2024

Bitcoin’s price action is highly sensitive to events in the world. Notably, the recent decline in the price of Bitcoin can be attributed to geopolitical conflicts in the Middle East. Its recent performance in the face of geopolitical turmoil casts doubts on its role as a safe haven asset. 

Spot Bitcoin ETFs, which are meant to prop up the Bitcoin spot price, also ended eight consecutive days of inflows with massive outflows on October 1, most likely in reaction to the Middle East tensions. According to Spot Bitcoin ETF flow data from Farside Investors, institutional investors pulled out $246.2 million yesterday.

Is Uptober A Myth?

The optimistic outlook seems to have faded quickly among many crypto investors. However, many participants are still holding on to the bullish outlook, especially considering the month still has a long way to go before its conclusion. 

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History shows, more often than not, that October has always been a positive month for Bitcoin. Most importantly, the positive performance was mostly in the second half of the month. Considering the month is only at its beginning, it is more logical to wait and examine how the price action plays out for the rest of the week before drawing any conclusion on Uptober. 

In the face of these tensions, Bitcoin’s potential role as a safe haven asset similar to gold could rise among market participants in the rest of the month and beyond.

Featured image created with Dall.E, chart from Tradingview.com