Bitcoin (BTC) is back above $60,000 into Q4, having delivered a September more successful than any in the past decade.
BTC price action has joined that of United States equities, conjuring an impressive comeback from lows in early August.
Can the good times continue via a classic “Uptober?”
While BTC/USD has greeted the new month with more of a sigh than a bang, the foundations are arguably in place to attack not only upside resistance but also its $73,800 all-time high.
August BTC price crash canceled
At 0.96%, Bitcoin’s Q3 performance may not seem that impressive — but its comeback from six-month lows stands out.
BTC/USD quarterly returns (screenshot). Source: CoinGlass
On a quarterly basis, BTC/USD barely flinched, regardless of volatility catalysts, providing an unlikely stable store of value as a result.
Within Q3, however, lies a trip below $50,000 to what, at the time, were Bitcoin’s lowest levels in half a year.
Hitting in early August due to macroeconomic jitters centered on Japan, the BTC price rout took just weeks to dissipate. The market fully canceled out its impact in time for the September monthly close.
It was a similar story for US equities, which, in their own return to form, even sparked fresh all-time highs.
“As Q3 concludes, both equities and Bitcoin have outperformed their expectations, defying their usual September downturn,” trading team QCP Capital summarized in a recent bulletin to Telegram channel subscribers on Sept. 30.
QCP noted that the S&P’s 5.1% Q3 gains mark its best performance since the late 1990s.
“This equity-led rally may be tested when Q3 earnings kick off in mid-October as traders reassess the current lofty valuations,” it acknowledged.
“We expect Bitcoin to benefit from any equity retracement due to its nature as a risk-on asset amidst global monetary easing.”
“Uptober” is here
Going forward, expectations for risk assets are indeed lofty — based on historical precedent, October, informally known as “Uptober,” should deliver substantial upside.
As Cointelegraph reported, in Bitcoin’s case, October has offered average gains of nearly 23%.
BTC/USD monthly returns (screenshot). Source: CoinGlass
“A similar increase would take us above 78k, breaking all-time highs,” QCP continued in another bulletin.
Skeptics, meanwhile, need to contend with more than six months of BTC price consolidation following March’s all-time high and April’s block subsidy halving. This, analysts argue, is already long enough, and history has shown that a breakout is now due.
“BTC has been trading within the 60k-70k range for 8 months now. Will Uptober be the month we finally see a big breakout?” QCP queried.
“The market is considering this possibility, especially with the US elections around the corner. Spot ETF inflows remain consistently positive, and perp funding is approaching levels reminiscent of Q1’s bull run.”
Institutional interest in Bitcoin, as measured by inflows to the US ETFs and other products, is becoming increasingly apparent, while there are even small signs that retail investors are returning to the market.
Easing, stimulus and liquidity
Fueling the risk-asset trend is an increasingly global spate of central bank financial policy easing, which now includes both the US and China.
Related: Bitcoin all-time high target remains as BTC price bounces back to $64K
September saw the Federal Reserve deliver a surprise 0.5% interest rate cut — something markets are keenly betting on repeating in November, per data from CME Group’s FedWatch Tool.
Fed target rate probabilities. Source: CME Group
China, meanwhile, has embarked on a giant stimulus package in a move that continues to spur the risk-on mood.
“In a matter of days, China has gone from severe recession worries to posting its biggest daily stock market gain since 2008,” trading resource The Kobeissi Letter wrote in part of a response on X.
“There has been so much economic stimulus that brokerages are crashing due to high demand.”
In the case of Bitcoin, Jamie Coutts, chief crypto analyst of Real Vision, believes that the writing is on the wall.
“Global liquidity is accelerating to the upside, and the 6-month pullback has removed the excess bullishness and positioning, creating the reset necessary for a major move higher,” he summarized in an X post on Oct. 1.
Bitcoin is traditionally correlated with global liquidity conditions.
BTC/USD vs. global M2 money supply (screenshot). Source: Lyn Alden
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.