Despite a significant crypto liquidation event last week, analysts remain confident that October will close on a bullish note for the cryptocurrency market. Industry experts have drawn parallels between this liquidation and previous major market disruptions, suggesting resilience rather than decline.
Scott Melker, a prominent crypto podcaster, expressed surprise at the market’s ability to maintain stability following what he called “the largest liquidation in crypto history.” Speaking this week, Melker noted, “After such an event, I anticipated deep losses in October,” but acknowledged that the markets holding firm felt almost miraculous. He reinforced his view that this event did not signify the start of a bear market.
The overall crypto market capitalization quickly rebounded to surpass the $4 trillion mark after the sharp weekend downturn. However, Bitcoin (BTC) has struggled to sustain momentum, retreating below $111,000 once again on Tuesday. Melker attributed last week’s losses to structural market dynamics rather than external shocks that influenced previous crashes in 2017 and 2021, such as the initial coin offering (ICO) frenzy, China’s mining ban, or the collapse of FTX.
He explained that the recent liquidation forced market participants to pause, reevaluate risks, and reconsider fundamental assumptions about the market’s limits and vulnerabilities.
Tim Sun, senior researcher at HashKey Group, highlighted the expected volatility in the near term. He told Cointelegraph that sentiment remains cautious following the pronounced deleveraging, and the market continues to react sensitively to news-driven catalysts. Nevertheless, Sun urged caution against excessive pessimism, emphasizing that medium- and long-term trends should be shaped by factors such as easing monetary policies, geopolitical tension reductions, and improvements in liquidity conditions.
October’s historical performance, often dubbed “Uptober,” supports the argument for a potentially strong finish this month. Bitcoin has recorded gains in October in 10 out of the last 12 years. Although the asset is slightly down by 0.6% so far this month, historical data shows that most October gains occur in the latter half of the month. For instance, Bitcoin surged 16% after mid-October in 2024, climbed 29% in the same period in 2023, and rose 18% during the second half of October 2020.
Complementing these trends, Melker highlighted the recent surge in gold prices, which reached an all-time high last week. He noted a typical investor behavior pattern where capital tends to rotate from gold back into Bitcoin after such gold rallies, implying a potential inflow of investment into cryptocurrencies.
Additional market factors appear supportive of Uptober’s bullish outlook. Recent easing in trade tensions—evidenced by confirmation of an upcoming meeting between former President Trump and Chinese President Xi Jinping—is reducing fears that contributed to the recent sell-off. Sun observed that trade conflicts are rarely zero-sum games; instead, both sides usually seek compromise, which could moderate current market anxieties.
Other narratives fueling positive sentiment include expectations for further Federal Reserve interest rate cuts this year and renewed interest in assets benefiting from currency debasement pressures.
While the market faces near-term volatility, analyst consensus suggests that the broader framework remains conducive to recovery and growth by the end of October.
