Uptober Delayed?
2024-10-04

One often-shared myth among crypto traders is that of 'Uptober'. After a slow summer, markets tend to pick up in October. This is somewhat based on historical data. October is the third-best best performing month for crypto assets after November and April going all the way back to 2012. Expectations for this current October are set high after the long-awaited Federal Reserve rate cuts finally materialized. And indeed, Bitcoin's price had started slowly climbing from early September onwards. The scene was set for an acceleration during 'Uptober'.

But as we know, reality rarely follows a trader's playbook. Escalating conflict in the Middle East has started to push up the price of crude oil. This throws additional uncertainty over what could be a worsening economic outlook, just ahead of a crucial American election. The number of unknowns is rising, and Bitcoin's price action continues to prove that it is still far from being seen as a 'risk-off' asset comparable to gold. As Bitcoin's price predictably retreated, Gold rallied. The BTC-Gold flippening is clearly a long way off.

However, it is not all doom and gloom. Bitcoin recorded both a higher low in early September compared to the previous August low and a higher high compared to one month ago. Also, the impact of rate cuts is only slowly starting to impact markets. The rate cuts will certainly benefit Decentralized Finance (DeFi) protocols who will once again be able to compete with their higher yields against now lower-yielding, but far more secure Government bonds.

The mood in markets has slightly shifted away from the misery that many participants felt earlier in the summer. The launch of the much-anticipated Eigenlayer token has so far played out better than some had expected. A slow renaissance of DeFi tokens is starting to register. And even a hippo-themed Memecoin rallied to $300m market cap in 2 days before retracing. Bullish traders continue to test the waters. Earlier in the year, the bulls had exhausted their buying power when the market rally fizzled out. Now it might be the bears who have nothing left to sell. Maybe not all hope is lost for an Uptober rally after all.