Bitcoin (BTC) Price Slides 8% but October’s Bullish Narrative Still Intact

Key Takeaways

• Bitcoin (BTC) reached a monthly high of $66,498 on Sept. 26.
• The BTC price has traded in a channel for over 200 days.
• Will Bitcoin increase in October and break out from the channel?

The BTC price increased for most of September, culminating with a high of $66,498. However, the price has fallen since Sept. 26, accelerating its rate of decrease in the past two days.

Historically, October has been one of the most positive months for the Bitcoin price movement. Will this year buck the trend, or was yesterday’s decline just an outlier? Let’s find out!

Bitcoin’s October Returns

Historically, October has had the second-highest average monthly returns,  at 22.90%, trailing November’s 46.81%. At the same time, October’s Bitcoin returns have been more dependable.

Only twice has the month been negative in Bitcoin’s price history, in 2014 and 2018, respectively. In contrast, November has had negative returns four times.

With this in mind, another historical pattern bodes well for this October in particular and the rest of the year. 

Every time September has had positive returns, October, November, and December have also been positive. Furthermore, all three months have been positive each election year.

Since the BTC price increased nearly 12% in September and 2024 is an election year, if previous history is followed, the next three months will be positive.

Bitcoin’s Lengthy Correction

Since March’s all-time high of $73,777, the Bitcoin price has decreased inside a descending parallel channel. During this time, the channel’s resistance and support trend lines have been validated numerous times.

The channel has so far existed for 204 days, making it one of the longest corrective patterns in Bitcoin’s price history.

After a sharp decline on Oct. 1, the BTC price validated the channel’s midline from above (black circle).

If it creates a lower wick, it will confirm the channel’s midline as support and make a breakout more likely.

Read More: Bitcoin Price Prediction 2024: BTC Price Analysis

The 3-day Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) are at 50 and 0, respectively.

So, whether the price bounces or not can determine if the indicators cross their bullish or bearish thresholds.

New Bitcoin All-Time High?

Our previous analysis stated that BTC needs to clear the $65,100 level to confirm its bullish trend reversal. On Sept. 26, BTC moved above this level. So, there are two potential alternatives for the wave count, both of which are bullish.

The first count suggests that the Bitcoin price has completed a W-X-Y correction (black), starting with an all-time high in March. In it, wave Y developed into a symmetrical triangle. The sub-wave count is in yellow.

While the count is valid, Bitcoin’s significant drop in the past two days puts it at risk. A decline below the breakout level of $57,488 will invalidate it.

The alternative count suggests that the correction ended earlier. It suggests that the BTC price started a new five-wave increase on Setp. 6 at a low of $52,546.

Because of the overlap, the movement is a leading diagonal, which will take the shape of an ascending wedge.

In any case, both wave counts suggest that Bitcoin has completed wave four and started the fifth and final wave of its long-term impulse. The most likely target is between $88,991-$93,040.

The 1.61 external Fibonacci retracement of wave four creates the lower limit of the target, while the upper one is created by giving wave five the same length as waves one and three combined.

The values can differ slightly based on which is the correct count since the beginning of wave five differs. So, both possible wave counts suggest that the BTC correction is over and a new upward movement has started.

Rally to End the Year

Bitcoin’s wave count and price action both give bullish outlooks, which fit with the historical pattern of October. Since September was positive, and 2024 is an election year, the entire end of the year may bring a big rally.

This fits with the long-term wave count, predicting an increase toward $90,000.

About the Author

Valdrin Tahiri

Valdrin discovered cryptocurrencies while getting his MSc in Financial Markets from the Barcelona School of Economics in 2017. He has been an avid investor and trader since. Valdrin has written for several cryptocurrency media companies such as BeInCrypto and CoinGape.

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