Bitcoin (BTC) Investors May Have Been Too Optimistic About Uptober

Bitcoin [BTC] investors have exhibited a lot of optimism about BTC in October, to the point that Uptober has been trending. This may have to do with multiple factors

Bitcoin [BTC] investors had a lot to be excited about in October, to the point that Uptober was trending. This could be due to several factors, including lower interest rates, historical performance in October and BTC’s latest bullish performance.

However, despite the bullish expectations for Bitcoin in October, there were signs that things could pan out differently. For example, a recent CryptoQuant analysis suggested that BTC’s latest highs observed towards the end of September could mark its latest local high.

The analysis was based on BTC’s NVT golden cross and its recent push above 2.2. Another analysis suggested that Bitcoin will likely struggle to maintain bullish momentum in October based on historic performance.

According to the analysis, Bitcoin rallied for two weeks after a major rate cut in 2019, followed by two months of bearish performance.

These observations suggested that Bitcoin may still be subject to sell pressure despite the prevailing hype. This was already evident in BTC’s latest performance.

The cryptocurrency had already given up some of its September gains, indicating that some investors were taking profits.

Bitcoin sell pressure mounts

Bitcoin recently threatened to dip below the $60,000 price point on 1 October. It was trading at $61,430 at press time. It has so far tanked by 7.8% from its highest price in September.

This meant it was on course to fall to the $59,580 and $57,940 price range as per the Fibbonacci retracement.

Source: TradingView

The pullback was indication enough that the hype post-rate cut announcement had run its course. However, this raised more questions than it answered. Would demand resume if price retests the Fibonnacci level?

On-chain data presented information that was consistent with the bearish outcome. For example, Bitcoin exchange reserves had maintained an overall downtrend for the last few months with slight upticks here and there.

The Bitcoin exchange reserves concluded September with a bit of an uptick. This confirmed that some coins had been moving from private wallets to exchanges. In most cases, this was consistent with a resurgence of sell pressure in the last few days.

Source: CryptoQuant

The exchange reserve uptick was also consistent with a dip in Bitcoin open interest since 26th September. This confirmed that the demand for Bitcoin in the derivatives segment also slowed down.

Source: CryptoQuant

Read Bitcoin’s [BTC] Price Prediction 2024-25

The findings suggested a strong possibility that BTC may face more sell pressure in the short run, as was currently the case, but this did not provide a clear timeline.

It could be a short-lived pullback or turn out to be a longer one, depending on how things will play out.