Today, the price of bitcoin rose above $28,000, leading some to claim that uptober has begun.
In reality, it has only returned to the levels of the first half of August, but compared to USD 24,800 on the 11th of September, it is now +13.5%. USD 24,800 was the low for this first part of the second half of 2023.
Summary
Upctober: Bitcoin price above USD 28,000
The term ‘uptober’ is obviously a play on words between “up” and “october”.
It refers to the fact that since 2013, the month of October has twice ended with a drop in the price of Bitcoin, while all other times it has been on an upward trend.
Moreover, the only two declines, in 2014 and 2018, were in the middle of a bear market, while even in the last bear market, last year, bitcoin still recorded +5% in October. Later, however, in November, with the FTX bankruptcy, it took its final bear market plunge, falling to $15,500.
Particularly interesting are the October results in the two years following the bear market, 2015 and 2019.
In October 2015, it was as high as +33%, although this was mainly due to the very disappointing performance of the previous months. October 2019, on the other hand, closed with a very respectable +10%.
September 2023 closed at around USD 27,000, so in the first few days of October it is now showing an encouraging +5%. Moreover, the overall performance of 2023 has been lower in percentage terms than that of, say, 2019.
Note that September opened at USD 26,000, so the final performance for last month was around +4%.
Bitcoin price in USD: Will November follow Uptober?
To be fair, with the exception of bear market years, November has generally been a fairly positive month for the price of BTC.
It is possible that this is due to a trivial tax-related technical issue.
Indeed, as the end of the year approaches, those who are making a profit on their Bitcoins tend not to sell in order to avoid reporting capital gains to the tax authorities. For example, if you wait until January to sell, you are effectively postponing the payment of any taxes for a year.
This means that in years when prices tend to rise, there are fewer people willing to sell at the end of the year, while in January this dynamic returns to normal.
Given that the majority of BTC wallets appear to be in the black at the moment, this logic could effectively influence the bitcoin market, and therefore its price, until at least December.
Conversely, in years when the price is falling and many are making a loss, it makes sense to sell before the end of the year to take capital losses and offset them later against any capital gains.
Growing interest
The concept of “uptober” is gaining popularity, especially among users of social networks.
Obviously, the concept that October tends to be a positive month is very popular and the word ‘uptober’ does indeed have considerable communicative power.
However, it must also be said that crypto markets often tend to underperform and do the opposite of what many expect.
Indeed, the increased interest in bitcoin due to expectations of an uptober may well lead to investors not wanting to sell in the short term, but it is also possible that it has already led them to buy in advance. If this is the case, the growth in demand may soon come to a halt.
And if they fail to live up to expectations, the disappointment may be so great that many will sell. It should be remembered, however, that these are short-term dynamics, whereas in the medium term historical dynamics may prevail.
Liquidity
Much will depend on the macroeconomic situation, as liquidity is needed for the price of bitcoin to rise.
However, there is one point that bodes well.
Today’s rise above $28,000 occurred when traditional exchanges were closed.
In particular, the Chinese and Japanese exchanges are closed today, while the first spike of the day coincided with the opening of other exchanges in the APAC (Asia-Pacific) region.
It is therefore difficult to link this rise to the traditional markets and this seems to be a good sign.
If it is a rise entirely within the crypto markets, it can only be interpreted as a sign of strength, also because today it is bitcoin that leads the crypto markets. In fact, its dominance has increased as well, taking it not too far from the yearly highs of late June.
At this point, it is not easy to see where the liquidity needed to fuel this rise has come from, but it is likely to have come from the Asian region.
