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Starting October with a downturn, Bitcoin (BTC) and the broader cryptocurrency market experienced significant volatility. Despite a green close in September, BTC saw a notable 7% decline as October began, stirring bearish sentiments among investors. However, many analysts maintain a positive outlook for BTC over the next quarter.
Is This The ‘Shakeout Before Breakout’?
The crypto community often refers to October as “Uptober,” and yet, the month began with a market correction, marked by a 6.5% loss in market capitalization. The majority of the top 100 cryptocurrencies experienced substantial price drops, although they still displayed gains on daily and weekly charts. Bitcoin led the downturn, plunging below the $61,000 support zone—a level not breached for nearly two weeks. This decline was linked to geopolitical tensions, particularly the Iranian missile strike on Israel, which triggered a wave of selling among investors.
The sell-off caused a halt in the 8-day inflow streak of BTC spot Exchange-Traded Funds (ETFs) and led to the liquidation of over $526 million in leveraged positions within a 24-hour period. Despite these developments, many market analysts remain optimistic, suggesting that the first week of October may only be a temporary setback. Crypto analyst Jelle noted in a series of X posts that Bitcoin historically begins its upward trajectory in the second or third week of October during bull years.
He emphasized that BTC has often made significant price breakouts during this period, suggesting that the current dip might be the “final shakeout before new highs.” Jelle highlighted that Bitcoin recently achieved its first higher high in six months and successfully reclaimed a critical resistance level above $60,000. He also pointed out that BTC established a higher low on October 1, maintaining the $60,000 support zone and showing strength above $61,000. According to Jelle, “It’s time for this descending broadening wedge to start playing out,” reaffirming his target of $90,000 for Bitcoin.
Analyst Warns About Bitcoin ‘Fifth-Day Plunge’
Other analysts have shared their perspectives on the recent market shakeout. Altcoin Sherpa noted that the last time Bitcoin experienced such compression with daily EMAs was in September 2023, right before the market surged. On the other hand, analyst DonAlt urged caution, suggesting that while Bitcoin could appear “much worse” under current conditions, waiting for the weekly close might provide a clearer picture.
Meanwhile, trader Daan Crypto Trades observed a recurring pattern where Bitcoin’s price has consistently “bottomed or topped” around the same time since June. According to his analysis, Bitcoin has experienced significant corrections on the fifth day of each month, except for September, when it occurred on the sixth day.
During the Q3 market corrections, Bitcoin recorded daily red candles leading up to these fifth-day plunges. Specifically, BTC saw declines of 16.3%, 25%, and 11% in July, August, and September, respectively, from the start of each month to the end of the first-week shakeout. If this pattern continues, Bitcoin’s price might dip below the recently reclaimed $60,000 support level, testing lower key support zones. However, it could also mean a potential recovery by the start of the second week.
As of the latest update, Bitcoin is trading at $61,466, reflecting a 2% decrease in the past 24 hours.
Conclusion
The start of October has brought challenges for Bitcoin and the cryptocurrency market at large. While geopolitical issues have contributed to volatility, analysts see potential for recovery and growth in the coming weeks. As the market navigates these fluctuations, investors are advised to stay informed and consider both short-term risks and long-term opportunities in the crypto space.
