Bitcoin (BTC USD) price just concluded October in the red, contrary to expectations perpetuated by the word “Uptober.”
The month that has historically been bullish yielded a bullish outcome, and this has investors second-guessing their previous bullish expectations.
The bearish Bitcoin (BTC USD) price action in October reflected the declining sentiment around the rate cut impact during the month.
This also raised concerns that were also echoed in macroeconomic expectations. Declining rate cut targets were among the factors highlighting the declining market confidence in Bitcoin price upside.
While rate cut certainty was near 100% percent earlier, the probability that the FED will lower rates to key targets has been declining.
The next FOMC meeting was slated to take place on 10 December. The probability that the FED will slash rates by 350 to 375 basis points was down to 63% and about 37% for 375 to 400 basis points.
FED chair Jerome Powell warned of pesky inflation risks, as well the tariff war’s impact on the market. Those concerns might be the reason behind the declining rate cut probabilities.
Bitcoin Sender/Receiver Ratio Falls to a 12-Month Low
Aside from lower rate cut expectations, bullish Bitcoin price expectations were also tempered recently due to declining activity.
Demand for the cryptocurrency in October was much lower compared to the previous 2 months. Bitcoin investors have consequently been wondering whether the bull run was coming to an end.
CryptoQuant data revealed that the ratio of senders versus receivers cooled down to its lowest level in the last 12 months.
The ratio has historically entered a downward trajectory when the cryptocurrency goes through a consolidation phase.
This means fewer addresses on both the buying and selling side, which is typically linked with higher levels of uncertainty.
The consolidation phase also highlights a balancing act as the market weighs whether to extend its rally or capitulate further to the downside.
However, a deeper dive into Bitcoin (BTC USD) performance indicators may offer more insights into the cryptocurrency’s next likely direction.
Could Bitcoin (BTC USD) Be Pulling Back For Major Comeback?
There were some noteworthy observations in October that offered hope to the bulls amid uncertainty.
For starters, the king of the cryptos still experienced net exchange outflows in the last 4 weeks despite the sizable pullback.
The declining Bitcoin exchange reserves in October confirmed that investors, especially long-term holders, were not eager to sell.
Speaking of pullbacks, BTC data indicated that the cryptocurrency was still in an overall bullish trajectory despite the retracement.
According to Bull Theory, Bitcoin (BTC USD) price landed on its mean reversion trend line after its dip on Thursday.
Interestingly, the cryptocurrency bounced back with significant bullish momentum every time it touched the mean reversion trend line in October.
The Bull Theory analysis also noted that the Bitcoin regression slope was still in an uptrend on its 100 and 200-day moving averages.
This aligned with recent sentiments from key industry figures like Michael Saylor, who believes that BTC was still headed towards $150,000.
While the indicators suggested that the bulls were on pause, it was clear that the markets were also concerned about downside risks.
Bitcoin previously pushed to historic highs, with market excitement approaching euphoria levels.
Moreover, markets were oversold, the gold rush was on, and recession concerns impacted sentiment.
Changes in macroeconomic environments at the peak of the previous bull run confirmed the top and could thus be a critical yardstick for measuring the top of the current cycle.