Bullish Uptober or Bearish Rektober: Will October 2024 Deliver a Crypto Boom or Bust?
Traders consider October to be a critical month for the crypto sector. Historically, the month often signals a rally in Bitcoin and altcoins, earning the month its nickname “Uptober.” However, despite the optimism, October can also turn bearish, leading to “Rektober.”
Traders see this month as a reset point, where the crypto market regains momentum after September’s typical underperformance. The 2024 edition of October is no different, with both bullish and bearish cues dominating investor sentiment.
BTC USD price action.
Historically, the month has been bullish for Bitcoin and, therefore, the wider market, with a huge number of uptobers visible on the monthly timeframe.
Uptober 2024: Key Bullish Cues Driving Optimism
Investor sentiment heading into October 2024 is generally optimistic, with multiple factors supporting a potential market rally. The influx of institutional money in Bitcoin and other ETFs would likely continue, and October is expected to see further gains as this capital continues to flow in.
Factors driving optimism for Oct. 2024. Source: Report
Moreover, a survey by NFTevening suggested that the outlook for October 2024 was bullish, with 27.6% of nearly 1,200 investors expecting a market rally. Institutional inflows from the approval of spot Bitcoin ETFs, particularly from financial giants like BlackRock, are expected to drive liquidity.
Additionally, crypto-friendly regulatory developments further support this optimism. With 75% of investors forecasting a positive October, the sentiment leans towards a strong rally, despite broader economic uncertainties.
Investors remained positive of a bullish October.
Another major bullish indicator is the Federal Reserve’s shift toward more dovish monetary policy. After nearly two years of aggressive rate hikes, the Fed has signaled a reversal, with rate cuts expected to stimulate the economy.
Lower interest rates typically make traditional assets less attractive, leading investors to seek out higher returns in alternative investments like Bitcoin and other cryptocurrencies. As the first rate cut was executed in late 2024, expectations are that liquidity will increase, further driving demand for crypto assets.
This dovish mood is a significant reason behind the growing optimism, as it enhances the market’s risk appetite and brings in more capital.
A third bullish cue revolves around Bitcoin’s halving cycle. Bitcoin has some historical fractals working in its favor. All these factors combined, along with the 75% of investors expecting a bullish rally, reinforce the possibility that October 2024 could live up to its “Uptober” reputation.
Rektober 2024: Potential Bearish Cues on the Horizon
Despite the optimism, there are several risks that could turn October into a bearish “Rektober.” One of the primary concerns revolves around the U.S. Presidential Election.
While market participants anticipate the election to have a significant impact on memecoins and other speculative assets, it may not provide the bullish boost expected for Bitcoin or Ethereum.
A failure of the election outcome to deliver regulatory clarity or market confidence could result in a broader market pullback, particularly if the election brings in an administration less favorable to cryptocurrencies. This could create uncertainty and cause the market to retreat, erasing gains from previous months.
Another potential bearish factor is the Federal Reserve. While the first rate cut in 2024 was a bullish sign, there remains a possibility that the Fed may not follow through with additional cuts, especially if inflation remains stubborn or the economy shows unexpected resilience.
If the Fed does not continue cutting rates, the anticipated boost to liquidity could be short-lived, forcing risk-on assets like crypto to stall. Without ongoing rate cuts, the market might not have the liquidity necessary to sustain a rally, leading to a sharp pullback.
Economic uncertainty weighed heavily on investors’ confidence.
Finally, broader macroeconomic concerns, such as a potential global economic slowdown, could weigh heavily on the market. If global economic conditions deteriorate, investors might flee from speculative assets like cryptocurrencies and shift toward safer investments.
The weakening economy, cited by over half of the pessimistic investors in the NFTevening report, could act as a significant drag on the market, especially if recessionary fears grow during October. In this scenario, the bullish momentum heading into October could quickly reverse, leading to a bearish downturn.
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