While October has historically been one of the strongest months for bitcoin prices, leading to online references to “Uptober” by the crypto faithful, prices fell 6% over the first three days of the month, resulting in fears of “Rektober.” That downtrend seems to be reversing over the last four days, however, as bitcoin prices have recovered all their previous losses to trade at roughly $63,700 as of press time.
And while ETH and SOL are still trading below their Oct. 1 prices, they have erased much of their losses to trade at $148.25 and $2,471.92, respectively, data from TradingView shows.
“Overall consensus is that the drop [at the start of October] was caused by the Middle East headlines and now… majority opinion is that all is good and we continue up,” said Maksim Tkachuk from analytics firm Santiment to Unchained.
Bitcoin’s positive price movement follows the Labor Department publishing a report on Friday that showed increases in both the number of U.S. jobs and wages, as well as a decrease in the unemployment rate, all good signs for the economy. Later this week, the Federal Reserve will release minutes from its September meeting and the Bureau of Labor Statistics will report inflation data for September, which will give some indication about whether the Fed will continue cutting interest rates and, if so, by how much.
Other positive macroeconomic news is also expected soon. “Speculation is building ahead of another potential stimulus announcement from China’s economic planning committee on Tuesday, following the monetary and fiscal measures introduced in September,” said Jake Ostrovskis, a trader at algorithmic trading firm Wintermute, in an email to Unchained.
Cautioning Against Overconfidence
Even though expectations for the remainder of October are largely positive, Santiment’s Tkachuk cautioned against overconfidence, pointing out that people’s expectations for September were “very negative and it ended up being a positive month.”
Tkachuk also noted the lack of new investors entering into the space. “Based on onchain movements of coins, we aren’t seeing the distribution from long-term holders to new holders, so coins are just sitting in their addresses,” said Tkachuk. This stagnation, he said, “is not good for prices.”
Read more: Is an ‘Uptober’ Bitcoin Price Rally Imminent?
Jim Hwang, the chief operating officer of crypto investment firm Firinne Capital, also warned that blanket terms like “Rektober” and “Uptober” tend to oversimplify things.
“The confluence of issues we have now—inflation, the U.S. presidential election, two regional conflicts, etc—is unlike other years,” Hwang told Unchained. “As for the [Consumer Price Index] print, it is not a foregone conclusion that inflation is beaten and rates are in a steady decline. And the [Middle East] conflict has strong risks of escalation.”
Memecoins Outperform
Memecoins—in particular, cat and frog-themed ones, as well as ones that are native to Solana—have posted especially strong 24-hour performances.. “Market sentiment is turning bullish again, with notable flows in memecoins,” Ostrovskis noted. “#POPCAT, #WIF, #BONK, #PEPE, and #SHIB are leading the bounce.”
As to why memecoins are outperforming other categories, Suki Yang, the founder of memecoin platform LMAO.Fun, argued that memecoins have more upside than existing cryptocurrencies or recently launched tokens with high fully-diluted valuations.
Read more: As Memecoins Surge, Could They Lead the Way for a Broader Crypto Market Rally?
The classic crypto story is of a person getting lucky and becoming rich on a single coin. “This cycle, that [classic story] would only happen with memecoins,” Yang told Unchained.
Meanwhile, Edward Wilson, a memecoin trader who also does growth marketing for onchain intelligence firm Nansen, said he thinks Uptober will continue because memecoins move markets. His reasoning is simple: “Memes are funny; Rektober isn’t,” he said.
The author owns more than $1,000 worth of BONK, as well as a few NFTs, gold, silver, and more than $1,000 each worth of BTC, ETH, LINK, AAVE, stETH, PEOPLE, MOG, and DOGE.
