Is an ‘Uptober’ Bitcoin Price Rally Imminent?

October has historically been one of the strongest months for bitcoin (BTC) prices, and bulls are eagerly anticipating the same this year, peppering their posts on X with exuberant references to “Uptober.”

But just how likely is it that prices will follow that pattern this year?

After languishing below $60,000 for much of September—a month that has historically yielded the worst returns for bitcoin (BTC)—the dominant cryptocurrency steadily ascended to $65,000 days after the U.S. Federal Reserve slashed rates by 50 basis points last week. It’s currently enjoying an uncharacteristic 10.5% return thus far in September, according to Coinglass data.

“The U.S. economy is in a good place, and our decision today is designed to keep it there,” said Federal Reserve Chairman Jerome Powell during the official press conference following the rate cut announcement.

Analysts now say that if Powell’s proclamation of a robust economy is accurate, October and November—the two best performing months for bitcoin since 2013—will rally as they mostly have for the past eleven years.

Bitcoin’s price has increased an average of 22% in the month of October since 2013, while it has surged a whopping 47% in November, according to Coinglass. While a large portion of those November gains occurred back in 2013 when bitcoin’s price soared 449%, that hasn’t stopped optimistic investors from referring to the month as “Moonvember.”

“Another Goldilocks scenario is obviously repeatable,” Brian Rudick, senior strategist at crypto investment firm GSR, told Unchained in an interview, referring to the confluence of cooling inflation, lower unemployment, and a Fed rate cut, the last of which has made riskier assets such as bitcoin more attractive.

“If we can get another cut, and [have] incoming economic data be solid, and have the Fed express confidence in the economy, it will probably be very supportive of bitcoin’s price,” Rudick added.

Upcoming releases of economic data, especially those related to inflation and employment, will be especially important since they will provide signs of what the Fed will do with interest rates at their next meeting in November, according to Rudick.

The Fed has two more meetings in 2024, one in November and the other in December. CME FedWatch, a tool that tracks the probabilities of changes to the Fed’s target rate, currently has the likelihood of another 50-basis point cut in November at just over 51%.

Mike Butler, options trader with financial network Tasty Live, told Unchained that he also believes September’s rate cut and the likely follow-up reduction in November both bode well for bitcoin.

“The 50-basis point cut…adds to the bullish market sentiment,” Butler said.

4 October Catalysts

Rudick told Unchained there are four specific drivers that he thinks will impact the price of bitcoin in October.

1. Monetary policy. The central Bank of Japan (BOJ) unexpectedly hiked interest rates for the first time in 15 years in July, causing a bloodbath in global markets as institutional investors taking advantage of low-interest Japanese debt were caught off guard. Cryptocurrencies weren’t spared, and five days after the announcement, bitcoin had plunged nearly 23%.

“Clues on what the Fed will do in November, as well as what the Bank of Japan does in terms of potentially raising rates at its meeting at the end of October, [are] going to be most important,” Rudick said.

The BOJ’s next monetary policy meeting runs from October 30-31.

2. The U.S. economy. Bitcoin, widely considered a risk-on asset (although BlackRock now categorizes it as a “global monetary alternative”) tends to underperform in unfavorable market conditions, as with similar risk-on assets such as equities and other cryptocurrencies.

The drop in bitcoin’s price in early August wasn’t just due to the BOJ’s surprise hike, but was also exacerbated by an uptick in the U.S. unemployment rate from 4.1% in June to 4.3% at the end of July.

“Folks were worried about the U.S. economy either slowing down or going into a recession,” Rudick said. “We’ll obviously get additional data about the economy next month, which I think will be really important.”

3. The U.S. Presidential election. For the first time in her 2024 presidential campaign, Democratic Party nominee Kamala Harris expressed her support for the crypto industry at a donor event in New York on Sunday and during a speech at the Economic Club of Pittsburgh on Wednesday.

Harris said she planned to ensure the U.S. remained “dominant” in emerging technologies such as blockchain, AI, and quantum computing, noting that these sectors “will define the next century.”

Her comments represent a stark contrast to the Biden administration’s perceived hostility toward the crypto ecosystem. But despite Harris’s restrained efforts to woo crypto voters, Trump is still considered the de facto pro-crypto candidate.

In his own economic policy speech earlier this month, Trump said he wanted to make the U.S. “the world capital for crypto and bitcoin.” In July, Trump gave the keynote address at the 2024 Bitcoin conference in Nashville, floating the idea of creating a national bitcoin reserve and saying he would fire Gensler as the chair of the SEC on day one of his presidency. Trump has also issued a series of NFTs, and most recently has been promoting a DeFi lending project called World Financial Liberty helmed by his sons.

He even became the first former U.S. president to publicly spend bitcoin when he purchased nearly a thousand dollars worth of burgers with the cryptocurrency at a bitcoin-themed bar in New York last week.

Nevertheless, Rudick said although BTC may surge on the likelihood of a Trump re-election, a Harris victory is unlikely to significantly hurt crypto markets since he feels that Harris will ultimately be friendlier to the industry than Biden has been, as well as the fact that there doesn’t appear to be a lot priced in for a much friendlier stance.

4. Institutional demand. The success of spot bitcoin ETFs propelled the price of bitcoin to a record high in March. As more institutional firms follow up on the bitcoin ETF feeding frenzy, the asset’s price will likely trend upward.

“Wealth managers like Morgan Stanley and Wells Fargo are finally allowing FAs [financial advisors] to solicit investment,” Rudick said. “I think that will be a slow, but very steady driver of demand.”

Another development that could further prop up BTC’s price is the recent SEC approval of the listing and trading of options on BlackRock’s iShares Bitcoin Trust (IBIT). If final approvals are granted by the Options Clearing Corporation (OCC) and the Commodity Futures Trading Commission (CFTC), bitcoin could enjoy increased liquidity, lower volatility, and price appreciation.

“I think there is certainly a shift in bullish sentiment in the market overall with the ETF options approval,” said Butler. “More ability to hedge risk for institutions and [to] speculate for retail investors all bring more activity to the crypto market.”