Bitcoin’s October Rally Gains Momentum
Bitcoin continued its strong performance this morning, breaking through the $116,000 barrier and pushing the total cryptocurrency market capitalization to over $4 trillion for the first time. The digital asset was trading at $116,441 at the time of writing, showing a 3.1% increase on the day according to CoinGecko data.
This recent surge has effectively erased most of the losses Bitcoin experienced over the past two weeks. The rally has been particularly beneficial for Bitcoin’s year-to-date performance, which has jumped from 15% last Friday to 25% as of October 1st.
Market Structure Shows Strength
The current uptrend appears to have some solid foundations. Bitcoin’s market dominance has rebounded from 57% to 59%, which analysts at Glassnode suggest indicates “a healthier market structure.” Their analysis points to Bitcoin-led rallies being more sustainable than those driven primarily by altcoins.
This sentiment is echoed in prediction markets, where users on Myriad platform are placing a 63% probability on Bitcoin dominance reaching 63% rather than falling to 53%.
Factors Driving the Rally
Several factors seem to be contributing to Bitcoin’s strong performance. Shawn Young, MEXC’s chief analyst, points to “structural demand, sustained exchange-traded fund flows, and a strong positioning from institutions” as key drivers.
Options market data supports this optimistic outlook. Bitcoin’s 25 delta skew has declined by 55%, signaling reduced demand for downside protection and growing investor confidence in the market’s upward trajectory.
Derek Lim, head of research at Caladan, suggests traders might be anticipating a bullish fourth quarter for crypto, potentially creating a self-fulfilling prophecy. Historical data supports this seasonal pattern—over the past 12 years, Bitcoin has consistently delivered median gains exceeding 50% during the fourth quarter.
Macroeconomic Conditions Favor Crypto
Broader economic conditions are also playing a role in the current rally. The U.S. government shutdown, subsequent pause in economic data releases, and the Federal Reserve’s dovish stance are creating what analysts describe as a favorable environment for cryptocurrency investments.
Interestingly, the slight decline in the S&P 500 during today’s electronic trading hours while Bitcoin rallied suggests potential capital rotation from traditional markets into crypto assets.
Market sentiment has shifted noticeably bullish, with predictors on Myriad now placing over 65% probability on Bitcoin reaching $125,000 rather than falling to $105,000—a significant increase from just 53% the day before.
