With bitcoin (BTC) reaching $68,000, hopes have been raised in the market that the “uptober” phenomenon will be repeated.
The price of the digital currency rose more than 6% yesterday, its best daily performance in almost two months. And, since then, it has remained trading mostly around USD 66,000, exhibiting resistance in this area just like last week.
“Uptober is starting”, commented the trader known as ‘Mister Crypto’ in the face of this rise. “History is repeating itself,” added the specialist, as did other enthusiasts on social networks.
October is the month in which bitcoin has closed higher the most times and recorded the most gains. For this reason, this period is known in the field as “uptober“, a term that combines the words october (October) and up (increase).
Without going any further, bitcoin remains in a consolidation range seven months ago, similar to the one seen last year that broke higher in October. This strengthens expectations that this phase will be left behind this month to go for new all-time high prices.
Taking this into account, it is key for the market to strongly exceed USD 66,000, since would consecrate a sustained upward trend for two monthswithin the consolidation period. During this period, the currency has been registering increasingly higher minimum and maximum prices.
This ascending pattern broke the bearish trend seen in the previous five months since it marked a new all-time high price. This is why USD 66,000 is a critical area to overcome with sufficient volume to strengthen its bullish potential, according to technical analysis.
“I still believe in uptober,” manifested Given this movement, André Dragosch, head of research at the Bitwise exchange. Attribute this to the fact that demand for bitcoin this month has risen to the highest levels since April, as the following graph shows.
“Maybe, just maybe, we are finally starting to see some momentum,” said Scott Melker from a moderate perspective in a report sent to CriptoNoticias. At the moment, the price of BTC has increased by 3% so far in October, “a pittance compared to the average and median monthly gains,” says the investor.
In any case, he highlights that the market now has “a situational advantage.” By this, he refers to “the probabilities of a favorable election result together with a sideways/downward trend of several months.” “All the right pieces are falling into place,” he says.
Presidential elections could be a catalyst for bitcoin
With the solid foundation that the market has shown these months, US presidential elections scheduled for November 5 could unleash greater demand. This idea is based on the bipartisan support that the candidates show for the ecosystem, especially if Donald Trump wins given his greater interest in the industry.
“Usually price movements are driven by news,” he says. “Once the market finally breaks this trend, you can expect media, advertisements and news to go into high gear; It’s just a matter of time,” adds Melker.
For him, it is crucial that the price of bitcoin overcomes and remains above the current resistance and then surpasses the psychological level of USD 70,000.
“Cryptocurrencies could see greater adoption by institutional investors looking for a way to trade election results, given the lack of regulatory clarity surrounding most non-bitcoin tokens,” a report notes. from the Coinbase exchange.
Candidates’ support suggests a more positive regulatory environment for the bitcoin and cryptocurrency ecosystem next year. For this reason, the exchange has clarified that its perspective on the elections as a factor of impact on the market “is quite optimistic.”
“As October progresses, participants will be closely watching economic data and the US elections, which could be drivers of the next wave of activity in the ‘crypto’ ecosystem,” the CoinEx exchange also mentions.
Go deeper into this, as reported by CriptoNoticias, which The outlook looks encouraging due to the interest rate cut in the United States that increases liquidity. However, he warns that the potential increase in unemployment could put pressure on the economy, so it is an area to watch.
With concerns about the economy, U.S. stock markets, which hit record high prices this month, could be overvalued. In tune, in China stocks have also skyrocketed with the cut in interest rates, despite the crisis it is going through as a result of deflation.
Therefore, this presents a risk for bitcoin since, in the event of a worsening of the macroeconomic situation, there could be a decrease in risk demand. Meanwhile, gold, an asset that is usually valued in times of uncertainty and crisis, is trading at all-time highs, which does not bode well for financial markets.
The bitcoin market perceives risks from the global environment
The recent escalation of war between Israel and Iran also, together with the sustained war between Russia and Ukraine, reflects risks that could affect financial markets. These geopolitical conflicts appear to be far from over yet, posing a potential black swan scenario.
In financial markets, a “black swan” is called an unpredictable event that causes a great financial impact, with significant and difficult to foresee consequences, such as an escalation of war.
The recent rise in gold, as well as silver, oil and stocks of arms manufacturers, highlights expectations of greater geopolitical tensions. With this environment, falls are not ruled out for bitcoinunless its valuation as “digital gold” grows due to attributes such as its shortage of supply and decentralized mining.
In this sense, although the bitcoin market is showing strength, it is vital not to have a bias in your analysis to foresee its continuity. The development of the macroeconomic and geopolitical environment will be key for the classic uptober to occur.
