"Uptober" Fever Grips The Market

Many cryptocurrencies, especially Bitcoin (BTC), have kicked off October on a positive note. At the time of writing this article on 2 October, Bitcoin is valued at just above $28,447 per coin, marking a 4% surge in the past 24 hours. This marks the first time since mid-August this year that Bitcoin has surpassed the $28,000 mark.

As Bitcoin continues its ascent, the cryptocurrency community is buzzing about the term "Uptober". But what does "Uptober" mean, and how does it tie into Bitcoin's current price movement?

The return of a historical trend

In essence, "Uptober" is a fusion of the words "up" and "October." In recent years, many enthusiasts within the cryptocurrency community have affectionately dubbed October as "Uptober" due to the historical tendency of Bitcoin's price to rise during this month. This is verified by data from CoinGlass, which reveals that, since 2013, Bitcoin has only seen two Octobers in the red: in 2018 and 2019, respectively. Apart from those two years, BTC has witnessed price increases every October throughout the past decade.

On the flip side of "Uptober" is "Rektember", a blend of "rekt" (cryptocurrency slang for "wrecked") and "September". Rektember earned its moniker because of another historical trend that reverses the Uptober phenomenon. Seven Septembers since 2013 have concluded with Bitcoin prices in the red.

If you're keeping up with these catchy terms in the community, then you may have noticed little evidence of Rektember this year. Bitcoin actually performed quite well for much of September 2023, registering a gain of over 9% during the past month.

It's crucial to recognise that both Rektember and Uptober lack scientific grounding, and past performance is not a reliable predictor of future results. Nevertheless, the crypto market is prone to follow memes and trends, so the psychological impact of these terms could potentially influence some investors to buy or sell the cryptocurrency, leading to a self-fulfilling prophecy.

That being said, October has just begun, and it remains to be seen whether this month will indeed be another successful Uptober for crypto investors or if Bitcoin bulls have anything to fear by Halloween.

Hodlers happy as short sellers shocked

Uptober started out with the price of Bitcoin and Ethereum (ETC) jumping around 5% within the space of just 15 minutes, a sudden move that must have pleased anyone holding a spot and long position on these cryptos as they saw the first substantial price movement in more than a month.

However, the swift surge triggered a "short squeeze" effect that left many short sellers in the hole as $70 million worth of short positions were forcibly closed within a mere two-hour timeframe. Additional examination conducted by CoinGlass broke down the shock of the abrupt price shift, revealing that around $38 million in BTC short positions and approximately $23 million in ETH short positions were liquidated, affecting over 29,000 traders.

Altcoins boosted by crypto market optimism

Bitcoin wasn't the only one to benefit from the Uptober surge. Cardano (ADA) gained 3.3%, while Polygon (MATIC) went up 5.5%. However, it was Solana (SOL) that led the pack with major gains of 14.5% as traders turned bullish on the Ethereum competitor.

What's behind the Uptober surge?

At the time of writing, the global cryptocurrency market capitalisation sits at $1.05 trillion, marking a 0.80% uptick over the last 24 hours. The renewed bullish sentiment around crypto could be a sign of wider market trends, along with a few factors specific to the crypto industry.

In the world of stock futures, there was a notable surge as trading commenced, prompted by a temporary agreement achieved by US legislators to prevent a government shutdown. Dow Jones Industrial Average futures saw a rise of 122 points, equivalent to 0.4%. Likewise, S&P 500 futures experienced a 0.4% increase, while Nasdaq 100 futures observed a 0.6% uptick.

With just hours to spare before the Saturday midnight deadline, the Senate successfully passed a continuing resolution. President Joe Biden promptly signed the bill into law, ensuring the government's operation for an additional 45 days. This extended duration grants lawmakers the necessary time to finalise funding legislation. The positive market activity could then be seen as investors letting out a breath they had been holding in anticipation of whether the US government would shut down or not. With the promise of stability in the air, optimism and risk-taking can return to the market.

Another factor directly related to cryptocurrency could be the anticipation around the possible endorsement of a spot Bitcoin exchange-traded fund (ETF) by the United States Securities and Exchange Commission (SEC). This possibility has been a trending topic in the crypto community all summer, but the prevailing consensus among analysts points towards January 2024 as the most probable time for such an announcement. What we have seen this week, however, is the opening of various futures-based Ethereum ETFs, with Grayscale filing an application with the SEC to convert its $5 billion Ethereum Trust (ETHE) to a spot ETF. Although Ethereum doesn't have the more mainstream appeal of Bitcoin, this could be driving excitement about ETFs for BTC and other cryptos.

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