As we enter the fourth quarter of 2024, Bitcoin (BTC) options activity is gaining momentum, reflecting a growing risk-on sentiment among traders. The arrival of October brings renewed excitement within the Bitcoin community, marking a time historically known for price rallies—popularly dubbed "Uptober."
Research indicates that Bitcoin’s price cycles typically initiate around 170 days post-halving, peaking approximately 480 days later. With the latest halving occurring around 170 days ago, many in the community are optimistic that this could signal the start of a substantial upward trend for Bitcoin.
Recent trading data shows a spike in options trading volume, particularly for contracts expiring at the end of October. This surge reflects a strategic positioning by traders who anticipate significant price movements. The heightened options activity aligns with the U.S. Federal Reserve's recent announcement of a rate-cutting cycle, which commenced this month with an initial cut of 50 basis points, infusing optimism into the market.
Traders are increasingly speculating on price movements, with particular interest in contracts with strike prices exceeding $100,000, especially for options set to expire on December 27. While the effects of a weaker dollar and the Fed’s easing of quantitative tightening measures have yet to manifest fully, overall market sentiment appears to be improving as traders adjust their positions.
The 2024 U.S. election is further igniting discussions around Bitcoin, with both major candidates entering the cryptocurrency conversation. Former President Donald Trump, once a skeptic, has shown support for digital assets by accepting cryptocurrency donations for his campaign and advocating for Bitcoin miners. His recent appearance at the Bitcoin Conference in Nashville and the launch of his decentralized finance initiative, “World Liberty Financial,” signify his commitment to the crypto space.
Conversely, Vice President Kamala Harris has also begun engaging with the cryptocurrency industry, showcasing a growing comfort with digital assets. Recently, her team released a policy document promising to encourage innovative technologies, including AI and digital assets, signaling a recognition of the importance of cryptocurrencies like Bitcoin.
Despite Bitcoin’s recent decline—driven by a "long squeeze" in the perpetual futures market resulting in over $49 million in long-position liquidations—analysts remain optimistic. Data from CryptoQuant highlights an overheated futures market, with open interest exceeding $19 billion. Historically, such conditions have led to price declines, but analysts are eyeing a potential turnaround.
As Bitcoin enters October, experts are closely monitoring global liquidity trends, a crucial driver for Bitcoin’s price. Julien Bittel, Head of Macro Research at Global Macro Investor, notes that the global money supply (M2) has started to rise again, a positive indicator for Bitcoin. He emphasizes that Bitcoin tends to respond rapidly to such liquidity injections, suggesting we may be approaching a critical point for long positions before entering what he terms the “Banana Zone.”
Another notable analyst, Michaël van de Poppe, has set a bullish target for Bitcoin, predicting that it could trade between $90,000 and $100,000 by the end of 2024.
As "Uptober" unfolds, Bitcoin is poised at a pivotal moment, with options activity reflecting an optimistic outlook among traders. Historical patterns, coupled with political developments and macroeconomic factors, contribute to a sense of anticipation in the market. With analysts projecting significant upward movements, traders and investors alike will be closely watching Bitcoin's price action in the coming weeks. Whether this October will indeed live up to its reputation as a month of bullish momentum remains to be seen, but the signs are certainly pointing in an encouraging direction.
October 2024, Crptoniteuae