October's 'Uptober' Effect Fuels Rally in Crypto Market, Bitcoin Regains Dominance
Summary:
The cryptocurrency market saw an upswing driven by Bitcoin, Solana, and several altcoins, bolstering the total crypto market cap to $1.1 trillion. Triggered by positive returns and a surge in volume, October, typically known as "Uptober," recorded significant gains. Despite some losses due to cyber attacks, Bitcoin is slowly gaining dominance in the market. With the onset of Ethereum ETFs and increased institutional interest, market sentiment is improving. However, potential economic uncertainties and enforcement actions could influence the future market direction.
Today, the crypto market sees an upswing as Bitcoin (BTC), Solana (SOL), and various other altcoins sprint towards rejuvenating the bullish swing typically linked to the term "Uptober." The progressive growth in crypto and stocks has driven the aggregate crypto market capitalization to $1.1 trillion, as of October 17. Delving into three key factors causing this spike in the crypto market is crucial.
Historically, October, often dubbed "Uptober," witnesses positive returns in the cryptocurrency world. Bitcoin and the crypto market's volume surged dramatically from $1 billion to over $2.7 billion on October 15. Such a rise in the volume brews optimism as Bitcoin's gains in October have traditionally remained steady, missing profits only thrice in the month. The volume on October 15 marked the month's highest daily trade volume, making October, statistically, one of Bitcoin's strongest months in terms of price appreciation.
After the third quarter of 2023 recorded $700 million in losses due to various cyber-attacks, a strong October was essential. Compounding the loss, the Fantom Foundation's hot wallet faced a theft of crypto worth $550,000 on October 17.
Leading up to the April 2024 supply halving, Bitcoin is regaining its upper hand in the crypto market. For the first time since June 28, Bitcoin has exceeded a 50% market share compared to the overall crypto market capital. A plateau in Bitcoin's dominance usually leads to a dash for altcoins and diverse cryptocurrencies. This signal of dominance follows predictions suggesting the BTC could hit $130,000 post the BTC halving event in 2024.
Starting October 16, the crypto market rally sparked a series of short position liquidations across the market, summing over $64 million within a day. Bitcoin leads this wave, with a record single transaction worth $2.53 million liquidated on the Binance exchange. However, with 50.9% of the futures market remaining short, an impending short-squeeze could trigger further price elevation.
Notwithstanding the SEC's denial to approve a Bitcoin ETF and its continued scrutiny on the crypto market, institutions' growing interest in the sector remains undeterred. This fact is evident with VanEck and Bitwise set to launch Ethereum ETFs on October 2. Bitwise plans to launch its ETF on the Chicago Mercantile Exchange (CME), while VankEck intends to introduce Ether ETF on the Chicago Board Options Exchange (CBOE).
While the persisting risk events could potentially impact Bitcoin and altcoins' price, growing institutional interest fosters market optimism. Indicative of this improved sentiment is the Bitcoin Fear and Greed Index, revealing a six-point rise over the past month.
Upon the whole, the crypto markets will continue to witness price fluctuations. Although the positive price movement in October provides short-term upliftment to crypto prices, how the market reacts to new enforcement actions or a potential economic downturn will dictate the future market trajectory. It is noteworthy that this article doesn't provide any investment advice or recommendations. Investors should bear the risk associated with their trading decisions and undertake independent research.
Published At
10/17/2023 8:22:13 PM
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