Historical Uptober becomes Red October for Bitcoin
Bitcoin just experienced its worst October performance in six years, breaking what had been one of the most reliable seasonal patterns in cryptocurrency markets. The month that traders affectionately call “Uptober” turned into a significant downturn, with Bitcoin dropping 3.69% from start to finish. This marks the first negative October since 2018, ending a six-year streak of gains during what’s typically Bitcoin’s strongest month.
The numbers tell a sobering story. Bitcoin recently traded around $109,820, down about 13% from its October 6 record high of $126,080. Over the past 30 days, the asset has declined by more than 8%. This performance stands in stark contrast to historical October returns—last year Bitcoin climbed nearly 29%, and back in 2021 it jumped a whopping 40%. On average, October has delivered investors returns of nearly 20% over the past decade.
Macroeconomic pressures weigh heavily
The downturn came amid unsettling macroeconomic conditions that seemed to catch many investors off guard. Federal Reserve Chair Jerome Powell’s comments that a rate cut was “not a foregone conclusion” sent digital assets into a tailspin, with Bitcoin briefly dropping below $106,000. This reset of rate cut expectations continued to pressure crypto prices throughout the month.
Analyst Noelle Acheson noted in her Crypto is Macro Now newsletter that “liquidity conditions have been tightening” and that Bitcoin remains “one of the more sensitive assets to liquidity conditions.” She explained that while equities have earnings and other factors supporting their appeal, and bonds have fiscal and economic growth dynamics, Bitcoin’s short-term performance is largely driven by monetary liquidity and sentiment.
Market structure vulnerabilities exposed
Juan Leon, Bitwise Senior Investment Strategist, pointed to three primary factors behind the negative October returns: “a powerful macroeconomic shock, fragile internal market structure, and a subsequent lukewarm monetary policy signal.” The October 11 crash had particularly long-lasting effects on market psychology.
Earlier in the month, Bitcoin and other risk assets tumbled after former President Donald Trump re-escalated his trade war with China, raising concerns about the global economy. This triggered massive liquidations—investors closed more than $19 billion in positions, with nearly 90% of them being long positions that had expected price increases.
Long-term holder behavior shifts
Another concerning trend emerged: increased selling by long-term Bitcoin holders. Some analysts suggested this might be tied to the belief that Bitcoin had reached a peak in its latest four-year cycle. Acheson noted that “if you still believe in the BTC four-year cycle, then we’re at the peak if you map previous cycle patterns.”
Pseudonymous CryptoQuant analyst Maartunn observed that this felt “like one of the weakest ‘Uptober’ performances in years,” noting that the decline wasn’t driven by a single broad selloff but rather by concentrated selling during U.S. trading hours. Other factors included China tariffs and economic data moving in less favorable directions.
Looking ahead with cautious optimism
Despite the disappointing October, some analysts remain optimistic about Bitcoin’s prospects. Grayscale’s Head of Research Zach Pandl pointed to potential catalysts, including the long list of crypto exchange-traded funds the SEC is expected to approve. He also noted that bipartisan market structure legislation appears back on track, and several altcoin exchange-traded products are set to launch.
“We expect that the crypto market setback will be short-lived,” Pandl told Decrypt. The question now becomes whether November can deliver the kind of performance it did last year, when Bitcoin spiked 37%—a development investors would undoubtedly welcome after this October’s disappointment.
