There has been a surge of optimism among Bitcoin [BTC] investors regarding the performance of BTC in October, with the term Uptober gaining traction. This positive sentiment could be attributed to various factors such as decreased interest rates, past historical trends in October, and the recent bullish run of BTC.
While the expectations for Bitcoin in October are bullish, there are indications that the outcome may differ. A recent analysis by CryptoQuant suggests that the recent peaks of BTC towards the end of September could signify a local high for the cryptocurrency.
This analysis is based on BTC’s NVT golden cross and its recent surge above 2.2. Another study indicates that Bitcoin might struggle to sustain its bullish momentum in October based on past performance trends.
Historical data shows that after a significant rate cut in 2019, Bitcoin rallied for two weeks followed by two months of bearish performance. This historical pattern raises concerns about the sustainability of BTC’s current uptrend.
Despite the positive outlook, Bitcoin seems to be facing selling pressure, evident from the recent retracement of its September gains as some traders book profits.
Escalating Selling Pressure on Bitcoin
On 1st October, Bitcoin flirted with dropping below the $60,000 mark and was trading at $61,430 at that time. The cryptocurrency has retraced by 7.8% from its peak in September, potentially heading towards the $59,580 and $57,940 range according to Fibonacci retracement levels.
The retreat indicates that the hype surrounding the post-rate cut has subsided. This scenario raises questions about whether demand will pick up once the price tests the Fibonacci level again.
On-chain data supports the bearish sentiment, with Bitcoin exchange reserves showing a consistent decline over the past few months, interrupted occasionally by minor increases.
In September, Bitcoin exchange reserves saw a slight uptick, signaling a movement of coins from private wallets to exchanges and suggesting a resurgence of sell pressure in the market.
Additionally, the increase in exchange reserves aligns with the decrease in Bitcoin open interest since 26th September, indicating a slowdown in demand for Bitcoin derivatives.
These findings point towards a likelihood of increased selling pressure on BTC in the short term, though without a definitive timeline. The current situation may result in a brief pullback or potentially a more prolonged correction, depending on how market conditions evolve.