Bitcoin (BTC) Dips in October, But Is This Just a Shakeout? Analyst Opinions Diverge
Bitcoin (BTC) Starts October with a Dip
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Despite a green September close, Bitcoin (BTC) and the broader crypto market experienced another downturn as October began. The leading cryptocurrency saw a 7% decline, prompting bearish sentiment among investors. However, many analysts remain optimistic about BTC’s performance in the coming months.
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The market’s opening week of October, often dubbed \”Uptober\” by the crypto community, was marked by a 6.5% decrease in market capitalization. Most cryptocurrencies within the top 100 witnessed a significant price drop, despite showing green numbers in daily and weekly timeframes.
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Bitcoin, the largest cryptocurrency by market cap, led the decline, falling below the $61,000 support level, a range not seen in almost two weeks. This downturn was seemingly fueled by geopolitical tensions in the Middle East, following news of an Iranian missile strike on Israel. The news triggered a sell-off among investors, ending the 8-day inflow streak for BTC spot Exchange-Traded Funds (ETFs) and resulting in the liquidation of over $526 million in leveraged positions within the last 24 hours.
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Analyst Perspectives on the Market Shakeout
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Despite the market shakeout, many industry observers remain unfazed, highlighting the early stage of the month. Crypto analyst Jelle, in a series of X posts, pointed out that Bitcoin historically entered its second leg higher during October in previous bull years. He noted that BTC typically breaks out in the second or third week of October, suggesting that the first week’s retracement could be a \”final shakeout before new highs.\”
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Jelle also emphasized that Bitcoin recently achieved its first higher high in six months and reclaimed the key resistance level above $60,000. He observed that BTC established a higher low on October 1, holding the $60,000 support zone and testing its strength above the $61,000 mark. The analyst believes that \”It’s time for this descending broadening wedge to start playing out,\” reaffirming his previous target of $90,000.
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Other analysts have shared their views on the market shakeout. Altcoin Sherpa highlighted that \”the last time we saw this much compression with 1d EMAs was September 2023, right before the market skyrocketed.\” Meanwhile, DonAlt expressed a more cautious approach, stating that Bitcoin could appear \”much worse\” given the circumstances, but recommended waiting for the weekly close for a clearer conclusion.
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A Potential Fifth-Day Plunge?
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Trader Daan Crypto Trades pointed out that Bitcoin has consistently \”bottomed/topped at basically the same time\” since June. According to his observations, on the fifth day of each month, BTC’s price has experienced a significant correction, with the exception of September when it occurred on the sixth day.
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During the Q3 retraces, BTC recorded daily red candles leading up to the fifth-day plunge. The price saw declines of 16.3%, 25%, and 11% in July, August, and September, respectively, from the beginning of each month until the end of the first-week shakeout. If this pattern repeats this month, investors could witness BTC’s price falling below the recently reclaimed $60,000 support level, testing the strength of lower key support zones. However, it would also suggest a potential recovery by the start of the second week.
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As of this writing, BTC is trading at $61,466, a 2% drop in the last 24 hours. The future direction of Bitcoin’s price remains uncertain, with analysts holding diverse opinions. Investors should remain vigilant and carefully monitor market developments.
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**Featured Image from Unsplash.com, Chart from TradingView.com**