Bitcoin [BTC] encountered resistance at $66.5k following a robust rally towards the end of September. Traditionally, October has been a month that tends to deliver positive returns for the cryptocurrency, but this time around, things seem different. Presently, BTC is showing a 4% decline from its opening price this month.
An analysis of the spent output age bands metric reveals that numerous long-term holders, particularly those in the 12 to 18 month range, opted to offload their Bitcoin reserves on the 8th of October.
Short-term holders also joined the selling spree, triggering a wave of sell-offs that rivaled levels not witnessed since January 2021.
Reevaluation of Bitcoin Halving Amidst Current Realities
In a recent analysis shared on X, CryptoQuant’s Founder and CEO, Ki Young Ju, highlighted that the ongoing sideways movement in the price of Bitcoin during a halving year might be on track to set a new record. During the 2020 cycle, Bitcoin initiated its bull run around the middle of October.
While Bitcoin’s performance in the initial quarter of this year surpassed that of 2020, the circumstances of these two years were notably different. The approval of spot exchange-traded funds (ETFs) in the United States in 2024 triggered a significant surge in demand.
Contrastingly, the emergence of the global pandemic in 2020 had investors and analysts bracing for severe economic repercussions, causing widespread panic.
An alternate viewpoint suggests that the longer the consolidation phase persists, the more robust the subsequent breakout could be. It remains to be seen whether Bitcoin is poised for another astronomical surge or if it has matured to a state where it may not experience the radical gains of past cycles.
Considering a Dip Purchase Scenario
A crypto analyst known as nestay indicated on X that historical trends reveal the initial weeks of October often exhibit volatility and a temporary downtrend preceding a recovery phase.
Comparisons were drawn from the price movements observed in 2021, 2023, and 2024. In all these instances, the market sentiment turned bearish before a bullish trend emerged in the latter part of the month.
These patterns might nudge investors towards the notion of buying the dip. While the possibility of Bitcoin replicating the strength of its previous cycles remains uncertain, seasoned investors might opt to HODL rather than sell in response to Bitcoin’s disappointing recent performance.