Historically, October has been one of the strongest months for Bitcoin, with many crypto enthusiasts nicknaming it “Uptober” because of delivering consistent gains over the years. However, history may fail to repeat itself this year due to the following reasons.
Why Bitcoin May not Rally in October
Bitcoin Retention Has Dropped
Analysts from Glassnode have noted a decline in BTC’s holder retention rate since mid-September. It has dropped to 80%, down from 81.84% on September 14. For starters, the holder retention rate shows the number of wallet addresses holding Bitcoin over a given period (usually 30 days).
A drop in this rate signals that investors lack conviction and are transferring their Bitcoins to exchanges to exit the market. If this persists, it could lead to increased BTC supply with reduced demand on exchanges. As such, sharper price corrections could occur in October.
Derivatives Market Flashes Bearish Signs
Bitcoin’s Taker-Buy Sell Ratio has been below one for most of September, suggesting that derivatives traders are bearish. It sits at 0.94 at the time of writing, according to data from CryptoQuant.
When this ratio is above one, it means that traders have placed more long trades than shorts, and when it’s below one, it indicates that short sellers control the Bitcoin market. So, unless the ratio climbs to one, Bitcoin may struggle to rally in October.
Whale Activity is Declining
Data from Santiment suggests that the whales (wallets holding at least 10,000 BTC) are losing interest in Bitcoin. The blockchain analytics company reported on Monday that these wallets collectively sold $5.5 billion worth of BTC last week.
When whales dump their coins, the BTC supply on exchanges rises, with retail traders unable to match it. In other words, retail activity alone isn’t sufficient to push Bitcoin higher. So, if the whales do not renew their interest in BTC, the coin could fail to post gains in October.
Bitcoin Price Analysis
Bitcoin is priced at $113,548 at the time of publishing. If bearish momentum picks up, the crypto asset could slide toward the $111,900 support and later to $107,550. On the bullish side, BTC could rise to the $120,000 resistance if it reclaims and stays above $115,890.
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