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| By Bruce Ng |
You’ve heard of Uptober — the nickname for October given by the crypto community due to the month’s historically bullish price action. My colleague Marija Matić covered this nickname, and why it’s holding up so far this year, in her recent issue.
We did see a pullback upon the launch of the first Ethereum (ETH, “B”) Futures ETF yesterday. However, the market structure is still considered short-term bullish. In fact, we think that Bitcoin (BTC, “A-”) will rally some more in the short term.
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Current Open Interest supports this theory. OI has remained largely the same before and after the move, signifying no significant exuberance nor overheatedness. So, this means there is a strong likelihood of continuation to the upside.
In addition to on-chain data, there are three macroeconomic factors coming up in the next few weeks that may affect the crypto market:
- The latest Consumer Price Index data will be released on Oct. 12.
- The Federal Open Market Committee rate hike decisions will go into effect on Oct. 31.
- The second deadline of the BTC spot ETF decision dates vary throughout mid-October, as shown below.
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We again expect the Securities and Exchange Commission will once again postpone their decision to the next deadline. And as we have mentioned numerous times, we only expect the approval to be pushed to the final deadline, which would occur next March.
Still, each time the decision is brought to the headlines, it invites short-term speculation and action. And it’s that infamous volatility that creates opportunities for savvy investors.
Conclusions
With all that said, let’s come to some conclusions for this week’s issue:
- We think there is more upside to this rally with $29,000 and $30,000 as realistic targets for BTC this cycle.
- However, once this rally dies down, we still believe there will be one final correction to $25,000 primarily because there is no new money inflow from outside of crypto.
That’s ok, though, as it’ll bring us to 2024 and the start of a new long-term crypto cycle. Meaning this correction should give us a solid foundation before the next bull market.
- October is historically a bullish month, every year. We don’t expect this time to be any different. Look out for this uptrend to continue for another one to two weeks.
In other words, we are short-term bullish, medium-term bearish and long-term bullish.
So, how should you move forward with this outlook? By planning.
If this rally is going to be short lived, as we expect, then that makes this a great time to start paying attention to narratives that have persisted throughout this neutral year. In particular, take note of the projects in those narratives that have been gaining support.
That will help clue you in on what sectors to have in your portfolio and which projects are likely to have momentum behind them. Of course, you’ll still need to research them carefully, but it’s an excellent start.
One narrative gaining popularity in this month is ironically named after Uptober: ARBTOBER, i.e., a bullish October for the Arbitrum ecosystem coins. These include Arbitrum (ARB, Not Yet Rated), Radiant Capital (RDNT, Not Yet Rated) and WINR Protocol (WINR, Not Yet Rated), among others.
But for more details on trending narratives and the ways you can play them, I suggest joining Juan Villaverde’s Weiss Crypto Portfolio.
Best,
Bruce
