Summary
- Bitcoin has experienced a 4.1% decline this week, coinciding with a $484.9 million drop in U.S. spot BTC ETFs on Wednesday.
- This downturn occurs in October, a month that has historically been favorable for Bitcoin.
- Analysts caution that Bitcoin's price may continue to fall, potentially testing support levels as low as $72,000.
Bitcoin has begun October on a downward trend, diverging from its historical performance during this month, often referred to as "Uptober." Analysts advise caution, suggesting that this month should not be seen as a guaranteed low point for Bitcoin, with further declines possible.
According to data from CoinGecko, Bitcoin recently dipped to $80,427 and is now trading just below $83,000, marking a 4.1% decrease over the last week. On Myriad, users predict a 79% likelihood that Bitcoin will finish the week above $82,000, while the chance of it exceeding $84,000 is only 28%.
Luke Deans, Senior Research Associate at Bitwise Europe, noted to Decrypt that the $83,000 level is significant, as it aligns with the average cost basis for ETFs and a previous technical threshold that has been tested multiple times in recent weeks.
Myriad: BTC price on October 11, 4PM UTC. Click to make your prediction.Identifying Support Levels
Bitcoin fell below the $83,000 mark early Thursday and is trying to recover. Deans remarked that the market's response will be crucial; if recovery proves difficult, lower support targets may need to be considered.
Ananda Banerjee, Founder and Principal Quantitative Researcher at Charlie Quant Lab, indicated to Decrypt that the strongest support level appears to be around $77,000, based on on-chain metrics showing a significant amount of Bitcoin was acquired at this price point. Deans concurred, noting that the average acquisition cost for active investors, referred to as the True Market Mean, is close to $77,000.
Deans also identified another support level at $74,000, corresponding to the Short-Term Holder Cost Basis, which reflects the average buying price for newer market participants. He highlighted that the 200-day moving average is at $72,000, providing an additional technical benchmark alongside on-chain data.
"From this perspective, Bitcoin could drop significantly from its current price and still be within a constructive risk-on framework," Deans explained to Decrypt. "A fall to the $72,000 to $77,000 range would represent a critical retest of a broader transition zone."
If this zone is successfully defended, it could transform a previous resistance area into support, signaling a positive development. However, failure to uphold this zone could undermine the current market structure.
Earlier in the week, Bitcoin attempted to break above $87,000 but was unsuccessful. This setback was attributed primarily to futures positioning rather than spot demand, as noted by analysts from Bitfinex in their comments to Decrypt. They observed that spot demand is currently lacking, pointing out that U.S. spot Bitcoin ETFs saw inflows of only $241.1 million for the week ending October 2, a stark decline from $2.39 billion the previous week. "The average ETF investor is at breakeven for the first time since January, typically a period of slow inflows," they remarked.
Investment Strategist Can-Luca Köymen from Sygnum Bank also indicated to Decrypt that diminished spot volume is inhibiting Bitcoin's price movements.
Bitfinex analysts believe that Bitcoin's trading range is currently between $84,000 and its yearly opening price of $87,722. They noted that the upcoming September Consumer Price Index (CPI) report on October 14 could shift this range, along with a potential increase in ETF flows.
On Wednesday, Bitcoin ETFs saw a significant outflow of $484.9 million, the largest single-day drop since June 25, according to Decrypt's ETF tracker. BlackRock's IBIT suffered the most, losing $207.7 million, followed by Fidelity's FBTC with a $105.1 million decrease. Experts suggest that these trends need to reverse for a successful Uptober, yet with an additional $244 million lost on Thursday, the downward trajectory continues.
Is Uptober Over?
So, is the anticipated Uptober now off the table? Most experts consulted by Decrypt were cautious in declaring the month canceled based on just one week of negative performance. Nonetheless, they advised against making investment decisions based solely on seasonal trends rather than fundamental indicators.
Jake Kennis, Senior Research Analyst at Nansen, stated to Decrypt, "Historical data supports the notion of October being a strong month. Bitcoin has recorded a median return of about 14% in October since 2013, with 10 of the last 13 Octobers ending positively."
"However, liquidity, positioning, macroeconomic conditions, and underlying demand are ultimately more significant factors than any specific date," he added.