The rally pushed major cryptocurrencies higher, with Bitcoin gaining 5% in the past 24 hours, while Ethereum (ETH) and Solana (SOL) rose by 6%.

Source: BNC Bitcoin Liquid Index

As Bitcoin surged, over $100 million worth of short positions, or bets against the asset’s price, were liquidated, per data from CoinGlass. This added further fuel to the rally.

The weekend also saw strong activity in memecoins, as speculative chatter about a possible “supercycle” spread among traders. Mog (MOG) extended its seven-day gains to 20%, while SPX6900, a meme coin, saw a 135% increase.

The rise of memecoins comes amid a broader lull in other sectors of the crypto market, including layer-2 networks and storage solutions. Sentiment around tokens backed by venture capital has also soured, with many traders viewing them as overpriced and unfavorable for retail investors.

China’s Stimulus

Bitcoin’s latest push higher coincided with a boost in Chinese equities, driven by renewed hopes for government stimulus. China’s finance minister, Lan Fo’an, indicated over the weekend that new measures to support the country’s property sector were forthcoming, along with hints of increased government borrowing. While the announcement was less than expected, it was enough to spur risk sentiment in global markets, including Bitcoin.

U.S. markets last week saw strong inflation data, with both the Consumer Price Index (CPI) and Producer Price Index (PPI) exceeding expectations. This initially confused markets, but ultimately the consensus was that core inflation trends remain steady. U.S. stocks hit new all-time highs, particularly in high-beta sectors, and the U.S. dollar rallied further. Traders continue to anticipate an 85% chance of a 25 basis point rate cut by the Federal Reserve in December, fueling optimism in both traditional and crypto markets.

Is Uptober Still a Thing?

Traders are talking again about “Uptober”, a quirk in Bitcoin’s seasonality that means October is generally a bullish month for Bitcoin and the Crypto markets.

Source: Coinglass

James Toldeno, the Chief Operating Officer at Unity Wallet, urges both caution and optimism as the markets show signs of a pick-up.

“My fear is that we try to derive meaning from repetition when it might just be coincidence and investors should be careful. We know from traditional markets and the wisdom of seasoned investors is not to look for patterns or try to time the markets. 

With that said, 2021 saw one of the largest October gains, with Bitcoin rising by 40%, driven by institutional investments and growing mainstream adoption. But these were down to specific events that could have a positive effect.

In years following Bitcoin halvings, Bitcoin has historically seen notable growth within 6 to 12 months. For instance, the 2020 halving preceded a 27.7% gain in October. We can now also point to significant ETF inflows as a mechanism for driving the price up.”

Here are some other factors to consider: October has tended to end positively, and it’s not uncommon for the month to start with a dip. In 2023, Bitcoin lost 7% in the first half of the month before rallying by 30% toward the end. Similarly, early October 2024 saw a 4% dip due to geopolitical tensions, which mirrors historical patterns of mid-month recoveries. Liquidation spikes have also been common in October, with 2024 seeing $540 million in liquidations early in the month. This aligns with past years when liquidation events preceded a recovery. Interest rate cuts by the Federal Reserve have historically boosted crypto prices due to increased liquidity and favorable borrowing conditions. In 2024, anticipated rate cuts are contributing to positive sentiment, which could support a late-month rally. Or maybe it’s just the calm before the storm.”

With two weeks left in October, we’ll soon know if it is to be another Uptober. Fingers crossed.