Can Uptober kickstart a bull run?

It’s been a rough ride for cryptocurrencies in the last quarter. The crypto winter is stretching on and most analysts are predicting some tough times ahead. Investors are looking for a hero. And that hero might just come in a form we don’t expect: Uptober.  

What is Uptober?

Like many trends in crypto, Uptober is a meme. It’s also a movement that’s hoping October could be just what the crypto markets need. Uptober is the idea that October has historically been a good month for cryptocurrency, especially Bitcoin. The exact origins of this meme are unknown but it started to gain prominence in the past few years. 

Some commentators have suggested that the reason why this uptick happens in October is because the Bitcoin whitepaper, in which the pseudonymous creator Satoshi Nakamoto laid out his vision for the world’s first cryptocurrency, was published on 31 October 2008. But it’s likely we’ll never know for sure. Besides, a little mystery is always entertaining.  

Regardless of where this idea came from, October does have some kind of credibility. Prices DO tend to go up in October. In fact, according to Coinglass data, 2018 and 2014 are the only years since 2013 that Bitcoin hasn’t enjoyed growth.  
 

This time of year seems to be particularly cyclical for crypto. Many investors hope that October can rally their assets after September. Seven of the past nine Septembers have been bad for crypto prices, earning the month a new nickname among crypto-savvy investors: Rektember (Rekt is crypto slang for experiencing a heavy loss). Over these months, September usually witnesses a 6% decline on average. This year was no different, with Bitcoin dropping 3.3% and Ether 15%. 

What are people saying about Uptober?

In case you didn’t already know, a lot of the most fervent discussion around cryptocurrency takes place on Twitter. In fact, it’s known among investors as CT, short for Crypto Twitter. Twitter is a great way to monitor trends and learn about what the people building in the space are interested in. This month, Uptober is creating a flurry of memes and bullish sentiments:  

CoinGecko, one of the industry’s biggest cryptocurrency ranking websites, posted this meme which pretty much sums up how most people will be feeling about the recent uptick in crypto prices:  

Another investor and writer in the crypto space posted a tweet documenting a list of positive developments in the space that they thought could contribute to positive price action for digital assets, ranging from technical developments across blockchains to NFT and token updates: 

How is Uptober going so far?  

Last year, Uptober had a powerful start, with Bitcoin charging to over $48,000 in just under an hour. This continued with 40% gains, making the month the best for Bitcoin price action since December 2020 

This year, Uptober could be very different. Unlike 2021, the bull market is over and the economic climate is very different. The traditional markets are struggling, inflation is high and many investors are planning ahead for how to manage significantly higher energy bills on top of their investments.  

That could be why Bitcoin had a much weaker start this October. On 1 October, Bitcoin was down 0.7%. But bullish investor sentiment appears to have grown over the first week of the month, with Bitcoin bouncing from $19,740 to over $20,000.  

How could the rest of the month play out? 

Fidelity analyst Jurrien Timmer stated his view that the markets are at the mercy of the United States’ Federal Reserve. This brings us on to another theory: the events of the next few months could lay the foundations for the next bull run.  

John Williams, president and CEO at the Federal Reserve said he wants to keep inflation rate at 2% in upcoming years, meaning that the markets are expecting a continual rise in interest rates until this takes place, meaning that the news is already priced in.  

This means that the markets could respond more decisively to something called a Fed pivot, in which the Federal Reserve changes their tactics and lowers interest rates. When interest rates have historically risen too high, the Fed pivots have signalled the market bottom soon afterward.

Inflation and unemployment rates could also be important factors that tie in with Federal Reserve activity for the markets. Although it could seem counter-intuitive, stock markets have responded well to increasing unemployment claims in the United States. This is because investors see rising unemployment as rising interest rates working to lower inflation. Despite strong economic headwinds, inflation is starting to creep lower around the world, according to Trading Economics data.  

Conclusion 

It looks like Uptober has some heavy lifting to do this year. An eight-year track record might seem appealing to some investors that are looking for any excuse to grow their assets during this period of low prices, but as many more experienced market commentators will know, past trends are no guarantee of future market behaviour.  

Despite this, bulls are pushing for higher prices and if Bitcoin can break out and sustain prices above $20,000, Uptober might just be able to add another year to its trophy cabinet. But investors should be aware that the macroeconomic conditions this year are tougher than any in the history of Bitcoin and it may be some time yet before the next bull run kicks off. Either way, with so much hope riding on crypto prices this October, it should be a riveting month for all market participants. Let’s wait and see.  

Tap here to get started with your Cryptober journey today! 

Disclaimer: The data provided in this blog is for information purposes only and should not be construed as investment or tax advice nor as a recommendation to buy, sell, or hold any particular security. SMART VALOR believes the data in this blog post is accurate, but does not verify its accuracy independently and does not warrant or guarantee that it is accurate or complete. SMART VALOR has no obligation to provide any updates or changes to the data. No investment decisions should be made using this data.