Crypto Markets Plunge as Middle East Tensions Flare

October has a history of being a particularly bullish month for Bitcoin.

By: Mehab Qureshi • October 01, 2024

The cryptocurrency kicked off October with a bang before the rally was derailed today by rising tensions between Israel and Iran.

On Tuesday, Bitcoin (BTC) fell 2% to $62,000, while Ethereum (ETH) dipped 3.5% to $2,500. Solana (SOL) and Polkadot (DOT) plunged 5% and 7%, respectively.

October, often dubbed "Uptober," has historically been a month of strong gains for Bitcoin. On average, Bitcoin has posted gains of 23% in 8 out of the last 9 Octobers.

Analysts from QCP Capital, a digital asset trading firm, suggest that a similar rise this year could push BTC above the $78,000 mark, potentially setting new all-time highs.

Ethereum also generally performs well in October, though not as dramatically as Bitcoin. Historically, ETH has averaged around a 5% return over the past eight Octobers.

“BTC has been trading within the $60k to $70k range for 8 months now. Will Uptober be the month we finally see a big breakout? The market is considering this possibility, especially with the US elections around the corner,” wrote QCP Capital.

Market Moves by "Young Whales"

According to the on-chain analytics platform CryptoQuant, a new trend has emerged among Bitcoin whales.

Contributor Cauê Oliveira noted in a blog post on Sept. 27 that "whales with over 155 days of inactivity have been less dominant in profit-taking as the price of Bitcoin has recovered."

Instead, newer whales, who entered the market in the past 5-6 months, have been actively taking profits. This indicates that interest in closing positions is more common among recent buyers.

Fed Uncertainty

Federal Reserve Chair Jerome Powell made critical statements on Monday regarding the central bank's approach to interest rates.

He mentioned that if the economy evolves as expected, the central bank could implement two more rate cuts this year, each by a quarter percentage point.

"Looking forward, if the economy evolves broadly as expected, policy will move over time toward a more neutral stance. But we are not on any preset course," Powell said during his remarks to the National Association for Business Economics.