Uptober Surge: Can Bitcoin Hit $100K in Weeks?

Bitcoin has recently dipped below the $84,000 mark after achieving a peak of $87,197 last Friday. Analysts are divided on whether October could pave the way for a rebound towards the $100,000 threshold.

Andreas Brekken, the founder of SideShift.ai, shared with crypto.news his optimistic outlook for Bitcoin in October, suggesting that investors are seeking new opportunities following recent capital inflows toward the SpaceX IPO.

“I’m predicting a strong Uptober and $100K in weeks.”

Brekken believes that investors who feel they missed out on early opportunities in AI may redirect their focus to cryptocurrency as a next viable option for risk assets. He described this shift as an “attention transfer,” attributing liquidity decreases to the SpaceX offering.

Other market experts tied their recovery predictions to tangible buying activity rather than merely shifts in investor sentiment. The Bitfinex team has pinpointed $84,000 as a crucial support level to be maintained, while analysts from Nansen and Bitget Wallet urged caution against interpreting October’s seasonal performance as a definitive market bottom.

Bitcoin’s $84,000 support risks leaving shorts vulnerable

As per the latest report from Bitfinex Alpha, Bitcoin dropped below the $84,000 threshold overnight, coinciding with the upcoming Federal Reserve minutes to be released on October 7, resulting in a series of forced position liquidations.

Within a 24-hour period, total liquidations in the crypto futures market reached $510.6 million, including $417.6 million from long positions. Approximately $300 million in long liquidations occurred within just an hour as Bitcoin fell below this key support level, the analysts noted.

Despite the market downturn, Bitfinex observed a 0.5% increase in open interest across major perpetual trading platforms on the morning of October 7 compared to October 5. This steadiness in outstanding positions was seen as a sign that new trades came in to replace those long positions that were liquidated.

With average annualized funding rates slightly declining yet remaining positive at 5% to 6.5% throughout the week, the analysts attributed much of the new activity to short sellers.

“If BTC maintains the $84,000 level, late short positions could find themselves trapped beneath this pivotal mark.”

Increased spot buying could exert pressure on those traders and may drive Bitcoin towards, or even beyond, its yearly opening price of $87,722, according to the analysts.

According to previous assessments from Bitfinex, 867,000 BTC are clustered around the $84,000 cost basis, which was identified as the largest concentration in their analysis. They also described this price point as the line where 75% of Bitcoin’s supply enjoys profit.

The unsuccessful breakout at $87,197 lacked solid spot buying

Bitfinex highlighted that last Friday’s rally was predominantly fueled by futures trading. Open interest surged by $2.1 billion in the 24 hours leading up to the release of the U.S. payroll report for September, before contracting by $1.5 billion as the report became public.

The analysts remarked that the absence of sufficient spot purchases to support the price surge led Bitcoin to retreat back to the $84,000 level after experiencing its third rejection below the yearly open within a two-week span.

They have projected a consolidation range between $84,000 and $87,722, with a potential upward breakout contingent upon ETF inflows returning to the daily average of $340 million seen in September.

In an October 6 report regarding Bitcoin’s stalled recovery, they indicated that several ETF sessions garnering at least $340 million each, along with a daily close above $87,722, would support a push towards $90,000.

The same evaluation estimated ETF investors’ average purchase price at $84,320, using Checkonchain’s flow-weighted calculations. According to Bitfinex, holders had spent 233 consecutive days below that price point before Bitcoin reclaimed it on September 21.

The analysts noted that a move back to breakeven could explain the diminished buying enthusiasm, as inflows have typically surged when ETF investors hold a more significant profit margin.

Recent ETF outflows do not concern DWF Labs’ Lee

Martin Lee, DWF Labs’ head of content and data insights, expressed that he was “not overly worried” about the recent $90 million withdrawal from Bitcoin ETFs on Monday.

He noted that the week of September 21-25 marked the best inflow week for funds this year, with around $2.4 billion coming in, succeeded by another $241 million in the following week. In his view, both preceding months had produced robust inflows.

A report from September 26 detailing September’s ETF inflows indicated the total for the September 21-25 period was $2.39 billion, as per Farside Investors. BlackRock’s IBIT benefited from $1.16 billion, Fidelity’s FBTC drew in $701.6 million, and ARK 21Shares’ ARKB collected $294.7 million.

Throughout the year, Lee found negative flows occurring on 93 out of 190 trading days, approximately 48%, despite net inflows totaling $1.2 billion.

For Lee, the overall weekly and monthly totals are more telling than individual daily sessions, although he noted that the withdrawals should be watched closely. Bitfinex’s concern, however, rests on the slowdown in new purchases, as their figures reveal a drop in weekly inflows from $2.39 billion to $241.1 million.

October’s historical record does not confirm a market bottom

Jake Kennis, a senior research analyst at Nansen, stated that Bitcoin has shown a median return of around 14% in previous Octobers since 2013, experiencing gains in 10 out of the last 13 years.

However, Kennis argued against the notion that these monthly trends signify a reliable bottom as of October 5.

“Ultimately, liquidity, positioning, macroeconomic conditions, and underlying demand are more crucial factors than any specific date.”

Kennis acknowledged Bitcoin’s 2.7% gain over the past week as a positive sign heading into October, but cautioned that it doesn’t confirm a bottom linked to the calendar. He pointed to changes in positioning after September and an improved risk appetite as potential factors contributing to the historical pattern of “Uptober.”

Lacie Zhang, research lead at Bitget Wallet, added:

“This year, Bitcoin’s low may have already taken shape near $57,000. The focus moving forward should be on macro liquidity conditions and ETF flows rather than on specific seasonal dates.”

Zhang also observed that weaker altcoins might take longer to rebound, even as they follow Bitcoin’s market trends.

In an October 5 analysis of Bitcoin’s conditional upside, Zhang identified the targets between $90,000 and $93,000, provided Treasury yields decrease and inflation metrics align with weaker employment data. She stated that a daily or weekly close above approximately $87,400, continued ETF inflows, and stronger spot demand are necessary for a definitive breakout.

For the upcoming U.S. inflation report, Bitfinex’s analysts are looking forward to the September CPI release on October 14, suggesting it could be a pivotal moment for Bitcoin’s trading range.