Cryptocurrency Surprise: ‘Uptober’ Kicks Off with Bitcoin and Ethereum Rally, $70M Shorts Liquidated

The cryptocurrency market welcomed October with a notable surge in Bitcoin (BTC) and Ethereum (ETH) prices. Bitcoin breached the $28,000 mark, showcasing a 3.3% increase over the last 24 hours, while Ethereum saw a price surge from $1,595 to $1,750, later stabilizing around $1,723. 

Happy Uptober to those who celebrate.

Remember 2021? pic.twitter.com/qgHy1ThGOf

— The Wolf Of All Streets (@scottmelker) October 2, 2023

This sudden rally has gained attention and raised questions within the crypto community: is this the beginning of a significant bull run or merely a fleeting price spike?

Bull Run Or Bull Trap?

The unexpected price surge aligns with what crypto enthusiasts term “Uptober,” where October historically proves to be a bullish month for the price action of cryptocurrencies. 

Historically, October + November are the best performing months for #Bitcoin. pic.twitter.com/JvNKqrZFlZ

— Miles Deutscher (@milesdeutscher) October 1, 2023

This market sentiment is supported by data from CoinGlass, indicating that October has produced negative monthly returns only twice since 2013. The surge coincides with the market’s anticipation of the first Ethereum futures Exchange-Traded Fund (ETF) within this month.

The crypto community is closely watching the potential approval of a spot Bitcoin ETF by the United States Securities and Exchange Commission (SEC). This ETF could provide easier access for institutional investors into the crypto market if approved. However, most analysts suggest that January 2024 is a more likely timeframe for such an announcement.

While long-term investors and “HODLers met the sudden surge with joy,” short sellers faced significant losses. Over $70 million in short positions were liquidated within two hours, including approximately $36 million in Bitcoin shorts and $23 million in Ethereum shorts. This emphasized the crypto market’s inherent volatility and the associated risks, especially for traders with short holdings.

Insights from Analysts

On-chain analytics firm Santiment provided valuable insights, suggesting that the Bitcoin bull run could continue into October. Their report highlighted that Bitcoin whales, owning between 10 to 10,000 BTC, accumulated their highest holdings in 2023, amounting to approximately 13.03 million BTC. 

Additionally, these whales have been quietly accumulating Tether (USDT) over the past six weeks, implying confidence in Bitcoin’s long-term prospects.

However, two major macroeconomic events scheduled for October could influence the crypto market: the U.S. unemployment rate report on October 6 and the CPI report on October 1. These reports provide insights into the economy’s health and inflation levels, both critical factors the Federal Reserve (Fed) considers when deciding on interest rates.

Impacts of Economic Factors

While the Fed paused interest rate hikes in September, financial experts anticipate this pause to be temporary. The Fed will likely resume raising interest rates in its upcoming November or December meetings to control and reduce inflation. The broader economic outlook significantly shapes the crypto market’s direction, making the U.S. unemployment rate and CPI reports in October essential indicators.

Welcome to Uptober.

Welcome to Q4, which is leading towards a great quarter, potentially fueled by ETF approvals and the pre-halving rally.

Potentially #Bitcoin to $40,000 is reasonable.

— Michaël van de Poppe (@CryptoMichNL) October 1, 2023

October started with a bullish tone in the cryptocurrency market. The surge in Bitcoin and Ethereum prices, possibly linked to the anticipation of Ethereum ETFs and the historical bullish trend of October, has brought enthusiasm to crypto investors. However, market spectators remain watchful of the broader economic scenario and the potential impacts of key macroeconomic events later this month.