(Commonwealth Union)_ Analysts are busy examining the key market swings that occurred in October, as November begins. While Bitcoin remained relatively constant in October, with only 5.89% gain, Arcane Research senior analyst Vetle Lunde forecasted the market’s path in the coming months.
“Uptober”, a reference to Bitcoin’s bullish historical performance in the month of October, was a recurring theme across numerous conversations on Crypto Twitter, and this performance appears to have occurred once more, according to Lunde. According to data, BTC and exchange tokens outpaced the large caps index until October 26.
With a startling 20% monthly increase, Elon Musk’s Twitter takeover helped propel the large caps index above Bitcoin. With a 144% rise over the last seven days, Dogecoin contributed to the large-cap strength.
The Bitcoin spot market in October was driven by increasing volume and lower volatility, as well as a short squeeze that briefly energised the market. According to Lunde, the latest week of October had the highest volume of short liquidation in cryptocurrency since July 26, 2021. While this action helped push Bitcoin up by 6%, Ether and BNB gained 18% and 19%, respectively.
Although the short squeeze contributed to the general uptick, Lunde found that the momentum did not result in a significant change in the price of bitcoin. The 30-day volatility index is at a two-year low, and BTC spot volume has increased by 46% over the past seven days. Additionally, compared to the yearly average of 3%, the seven-day volatility index is currently lying at 2.2%.
BTC volatility is on a 30-day and 7-day basis. Arcane Research is the source. When comparing the volatility of a previous short squeeze to the volatility of the recent short squeeze, Lunde stated: “The July 26 squeeze witnessed a 15% daily high-low variation as markets rushed higher, whereas the October 25 and October 26 moves had 5% and 6% daily high-low differences, respectively.” Furthermore, momentum has ceased, indicating that “traders should brace themselves for a longer period of consolidation”.
According to Lunde, while Bitcoin is priced advantageously, the ideal approach to this market is to dollar cost average in the short run rather than employing leverage. Bitcoin has been enjoying unusually low volatility and closely follows the US equity market, thus it is critical to monitor Q3 earnings releases.
