Uptober? May be too early to tell, analysts warn 

On Oct. 1, more than $70 million in cryptocurrency short positions were liquidated, pushing bitcoin and ether more than 3% and 4% higher, but gains were quickly erased

article-image

dominic8/Shutterstock modified by Blockworks

share

With a rocky September behind us and federal funding ensured until mid-November, stock and crypto investors are hoping for a successful October, but Monday’s rally has proved short-lived. 

“October is typically a strong month for bitcoin, earning it the term ‘Uptober,’” author of Crypto is Macro Now and former head of market insights at Genesis, said. “And while we know that patterns don’t necessarily repeat (after all, this past September turned out to be positive, breaking a six-year trend), they are comforting.” 

More than $70 million in cryptocurrency short positions were liquidated on Oct. 1, pushing bitcoin and ether more than 3% and 4% higher, respectively. An eleventh hour deal on Capitol Hill to prevent a government shutdown, at least for the next 45 days, could have spooked short traders. 

Short positions are still ahead, with about 50.5% of the futures market in shorts as of Monday. A short squeeze could propel prices higher. Cryptos had lost their momentum by Monday afternoon though, with bitcoin (BTC) losing around 0.6% and ether (ETH) in the red more than 4%. 

“Over the past few months, we’ve seen a few of these sharp spikes up. Usually they are followed by a correction, sometimes sharp and sometimes gradual, but almost always reverting to where the market was before the upward move,” Acheson said. 

Stocks posted a disappointing month at the end of the third quarter. The S&P 500 and Nasdaq Composite indexes lost 4.9% and 5.8%, respectively, in September, marking it the worst month for returns in 2023. 

Read more: Nasdaq says it’s not the ‘right time’ to launch crypto custody business

“Market breadth deteriorated last week but the percentage of S&P 500 constituents trading above their 200 day moving averages stabilized near the 2023 lows, another potential sign of a relief rally forming,” Tom Essaye, founder of Sevens Report Research, said. “Investor sentiment indicators dropped to the lows of the year last week but ended off the worst levels Friday. If the lows in the Fear-and-Greed index hold, that further supports an emerging relief rally.” 

Cryptocurrencies, on the other hand, were able to stay in the green. Bitcoin and ether gained about 4% and 1.5% in September 2023, respectively. These mild returns came after a bad August, where both cryptos lost more than 11%. 

Stocks look poised to end the first trading day of October relatively flat. The S&P 500 is down by approximately half a percentage point, while the Nasdaq Composite is marginally positive at the time of writing.

Traders are still betting on the Fed extending its interest rate pause at its next policy meeting in a month, according to CME data, which currently shows about a 74% likelihood the central bank opts to hold rates.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Permissionless is a conference for founders, application developers, and users. Come meet the next generation of people building and using crypto.

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

4.png

Research

This months PPGC covered four main areas. Firstly, debriefing the progress and status of the mainnet implementation of the Ahmedabad hard fork. Secondly, a retrospective on the testnet phase of the Ahemdabad Hard Fork. Thirdly, an update on PIP-36 which involves replaying failed state syncs. Lastly, PIP-47 which pushes upgrades to the Polygon Protocol Council.

article-image

Institutions to test out the settlement of “digital assets and currencies” on a network that annually carries more than 5 billion financial messages

article-image

After Bitwise’s XRP ETF filing this week, one industry watcher notes: “Politics will determine whether this happens soon or in a few years”

article-image

Plus, a look back at some of the SEC’s biggest enforcement moves under Gurbir Grewal

article-image

The forward-looking financial system is being championed by several contributors to India’s UPI digital money system

article-image

Multiple teams are pursuing integration cross-chain and off-chain

article-image

An SEC spokesperson told Blockworks the Ripple judgment clashes with Supreme Court precedent and securities laws