Here’s why Bitcoin recorded Red October for the first time in 7 years

For over a decade, October has been some of the bullish months for Bitcoin.

Up to now, we’ve averaged returns of roughly 22.5%, supported by post-summer liquidity, year-end portfolio positioning, and extra not too long ago, regular demand from US funding merchandise.

Because of this, confidence within the sample was excessive once more this yr. And true to kind, Bitcoin set a brand new file above $126,000 within the first week of the month as merchants shortly introduced again the acquainted “Uptober” slogan.

However the non permanent selloff worn out the preliminary positive factors inside days, and in contrast to tech shares and different dangerous belongings, Bitcoin by no means regained its worth.

Because of this, the month’s closing worth fell, the meme failed, and the market was reminded that slogans do not take up provide.

Echoes of 2018

What’s outstanding about this October is that it rhymes so properly with 2018.

At the moment, October merely stopped rising and didn’t collapse. November and December noticed a pointy decline as regular seasonal tailwinds weakened, with Bitcoin falling greater than 36% in November alone.

The conclusion was easy. When costs do not rise even in traditionally sturdy months, it means underlying weak point is already in play. That weak point will be brought on by oversupply, declining demand, and even tight macroeconomic circumstances.

There’s a comparable environment this yr. Calendar didn’t cease working. Somewhat, the market entered October exhausted.

After a robust first three quarters, merchants’ positions had been heavy, liquidity was uneven, and long-term holders began taking earnings at each signal of power.

Why did Bitcoin worth drop in October?

On-chain knowledge explains a lot of why Bitcoin costs slumped in October.

Lengthy-term BTC holders have been steadily spending their cash since mid-July, with realized gross sales growing from about $1 billion a day to $2 billion to $3 billion a day by early October, in accordance with knowledge from blockchain analytics platform Glassnode.

It states:

“Filtering by age cohort, we discover that holders between 6 million and 12 million had been driving greater than 50% of the current promoting stress, particularly within the later levels of the highest formation. At an ATH of round $126,000, their spending exceeded $648 million per day (7D-SMA), greater than 5 occasions the baseline in early 2025.”

Importantly, this distribution was not a panic surge like earlier capitulation occasions. Steadily, tenaciously, it displayed all its power.

The corporate stated most of the cash got here from wallets bought for between $70,000 and $96,000, with a mean value of practically $93,000.

This means that the transfer is extra about profit-taking after a robust efficiency somewhat than issues about an financial downturn.

On the similar time, Bitcoin’s droop was additional exacerbated by the truth that the variety of patrons decreased considerably in October.

Cryptoquant, a cryptocurrency evaluation platform, famous in its weekly report that U.S. investor urge for food throughout spot markets, ETFs, and futures has slowed noticeably following the late September rally.

The truth is, ETF inflows have cooled considerably to lower than 1,000 BTC/day, considerably decrease than the common of over 2,500 BTC/day seen at first of this cycle’s main bull market.

Moreover, the spot foreign money premium narrowed and the ahead foundation retreated.

Moreno stated these had been alerts that U.S. patrons had been pulling again at a time when long-term holders had been promoting extra.

Alternatively, the macro background additionally amplified the drag.

This yr has been dominated by commerce tensions, notably between the US and China and the flare-up within the Center East. The Federal Reserve additionally continues to take a restrictive coverage stance to take care of tight international greenback liquidity.

Contemplating all this, analysis platform Cronos characterised October’s pullback as a “liquidity pressure somewhat than a pattern break,” noting that regardless of the flush out of leveraged longs, Bitcoin nonetheless serves as a relative secure haven.

What’s subsequent for BTC?

An uncomfortable similarity for bulls is that final yr’s Purple October preceded a tough year-end.

In 2018, the lack of seasonal help, thinning liquidity and extra decisive distributions to long-term holders pressured patrons to sit down again just a few toes and wait.

However immediately’s market is more healthy. That is as a result of the investor base is deeper, stablecoins have higher liquidity, and controlled merchandise can now supply slower, extra secure bidding that did not exist seven years in the past.

With this in thoughts, BRN head of analysis Timothy Missil described the present regime as a market that’s “recalibrating somewhat than collapsing,” including that so long as Bitcoin stays above the $107,000 to $110,000 zone, institutional accumulation will proceed behind the scenes.

Nonetheless, October’s print version modifications the dialog. If Bitcoin fails to rise in the course of the month it sometimes rises, the burden of proof shifts to the bulls.

The ultimate two months of the yr are prone to be decided much less by Uptober memes and extra by whether or not long-term holder spending cools once more towards $1 billion a day and whether or not U.S. ETF flows reaccelerate.

If provide stays excessive and regulatory bids stay gentle, 2025 may very well be a unstable and irritating year-end much like 2018. However as soon as flows return and geopolitics settles, October may very well be much less of a begin and extra of a brief, orderly handover from previous to new holders.