Cryptocurrency Market Begins October with Strong Rally amidst Potential Volatility
Summary:
The cryptocurrency market showed strong performance as major altcoins, including Bitcoin and Ether, rallied at the onset of October. Some of the factors prompting this rally include the positive historical performance of Bitcoin in October, the U.S. government's avoidance of a shutdown and sustained interest from large institutions, despite regulatory opposition. Bitcoin's short liquidations also significantly increased, suggesting an opportunity for a potential short-squeeze. Despite the promising start to October, the cryptocurrency market is expected to face volatility due to potential risk events and economic changes.
Today, the cryptocurrency market saw an increase as Bitcoin (BTC), Ether (ETH), XRP (XRP), Cardano (ADA), and many altcoins launched a rally for the start of October. Positive responses to the temporary USA government shutdown deferral from crypto and equities markets increased the total crypto market cap by $3.7 billion, reaching $1.1 trillion on October 2. Today's rally in the crypto market may be tied to three key factors we'll explore.
October – traditionally celebrated as "Uptober" because of its consistent positive results in the crypto market – is already off to a promising start. With only 3 exceptions, October has consistently seen Bitcoin's earnings remain positive. Consequently, Bitcoin's positive performance in October makes it one of the strongest months for Bitcoin's price increases.
This strong start to October is a refreshing change following the third quarter's $700 million losses due to various hacks in 2023. An Oct 1 surge raised a wave of short position liquidations across the crypto market, amounting to over $92 million within 24 hours. Bitcoin short liquidations were at the forefront, with a leading single transaction of $8.39 million on the Huobi exchange. In total, Bitcoin shorts totaled a sum of $51.5 million in just one day.
Despite persistent losses by short-sellers, the futures market fuels skepticism about more than half of its participants. This could trigger a potential opportunity for short-squeeze, further driving the prices upward.
Avoiding a government shutdown may have contributed to the Oct 1 price increase in cryptocurrencies, flushing out $70 million. Even though the Securities and Exchange Commission (SEC) denied a Bitcoin ETF permission and continues to clamp down on the crypto market, large institutions remain engaged in the scene.
This engagement has resulted in the launch of Ethereum ETFs by both VanEck and Bitwise on Oct 2. Bitwise ETF will be launched on the Chicago Mercantile Exchange (CME), and the VanEck Ether ETF on the Chicago Board Options Exchange (CBOE). Even though there are ongoing risk events that could influence Bitcoin and altcoins prices, the increasing institutional interest is positively shaping market sentiments. The Bitcoin Fear & Greed Index reflects the improved sentiment, indicating an increase of 11 points over the last month.
The predicted volatility of crypto markets will likely continue. Although October had a positive start, increasing crypto prices, it is uncertain whether new enforcement activities or an economic downturn will determine the market's direction. This piece does not offer investment advice or suggestions. We encourage readers to carry out their research before making any investment or trading decision as all investment and trading activities carry inherent risks.
Published At
10/2/2023 5:03:09 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.