October’s bullish “Uptober” narrative appears to be regaining momentum, with bitcoin reaching a daily high of almost $64,000 in the past 24 hours before pulling back to now sit around the $63,000 mark, according to analysts.
“After a shaky start, Uptober seems to be back on track, with bitcoin holding steady at levels similar to where it started last Monday. With additional rate cuts lined up and bitcoin’s strong correlation to equities, we remain optimistic about a strong October,” said analysts from QCP Capital.
The Uptober narrative is based on October typically being a strong month for bitcoin, averaging nearly 30% gains during the month in eight of the last nine years, according to QCP Capital.
U.S. employment data bolsters risk asset optimism
The analysts also pointed to potential macro drivers stemming from the recent strong Non-Farm Payrolls (NFP) data in the U.S. “The employment figures have helped bitcoin find strong support above $60,000,” they added. The U.S. NFP exceeded analysts’ estimates by a significant margin, reaching its highest level in four months at 254,000, compared to the estimated 147,000. Data from the previous month was also revised upward by 17,000, bringing it to 159,000. Additionally, the unemployment rate fell to 4.1%, lower than the expected 4.2%, according to the U.S. Bureau of Labor Statistics.
Investors will now be closely watching the U.S. Consumer Price Index data set to be released this Thursday, according to today’s QCP Capital report. Given the recent strong U.S. wage and jobs numbers from last week, the analysts said the market will be paying close attention to Thursday’s print for any signs of cooling inflation.
The recent positive macroeconomic data may have shifted interest rate traders’ expectations regarding the scale of a potential rate cut by the U.S. central bank at the next Federal Open Market Committee meeting on Nov. 7. According to the CME FedWatch tool, interest rate traders are currently favoring an 88.9% likelihood of a 50 basis-point cut, compared to an 11.1% chance of a 25 basis-point cut at next month’s policy meeting.
In the derivatives market, QCP Capital analysts noted that the distribution of options still indicates a bullish outlook for the fourth quarter. “Despite the rough start last week, options flows are still pointing to a bullish Q4, as we continue to see buyers of December $75,000 and $95,000 strike price calendar spreads,” they stated.
Additionally, the analysts highlighted the increased attention on the digital asset space that could potentially come from the upcoming HBO documentary, “Money Electric: The Bitcoin BTC
+1.85%
Mystery,” which seeks to unveil the true identity of Satoshi Nakamoto while speculating that computer programmer Len Sassaman might be the founder of the Bitcoin network. “The documentary has brought more mainstream attention to crypto, with memecoins themed around Len Sassaman starting to gain traction,” the analysts added.
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