Macro crypto currency market outlook

Bitcoin has broken out to the topside after a multi-month consolidation going back to March of this year. The push to a fresh yearly high above $32,000 has opened the door for this next major upside extension, with an initial measured move target objective at $40,000. Any setbacks should now be exceptionally well supported on dips, with only a break back below $25,000 to compromise the constructive outlook.

Seasonality trend analysis did not disappoint in October. Heading into the month we highlighted the possibility bitcoin would perform well on account of October being the strongest performance month for bitcoin since inception. In the end, bitcoin closed out October up 27%, outshining all other major assets across both crypto and traditional markets. Indeed the run higher in the price of bitcoin also managed to have a positive spillover effect on ether, which closed out the month up 8%.

One of the most interesting takeaways for the month was bitcoin’s outperformance in the face of intense downside pressure on risk assets, against a backdrop of geopolitical tension and ongoing higher for longer monetary policy communications from the Federal Reserve. The key point here is that against the risk liquidation backdrop, bitcoin was able to outperform on the recognition of the asset as an attractive store of value play. By comparison, the only other major traditional asset to outperform in October was gold, though gold was up a more modest, but still impressive 7% on the month.

Of course, there were other factors contributing to bitcoin’s outperformance, namely developments from the regulatory front. Bitcoin already has a decided advantage over ether and other cryptocurrencies when it comes to regulatory acceptance. And in October, we saw even more positive momentum in bitcoin’s favor on increased optimism around the SEC approval of a bitcoin spot ETF. The market knows such an approval will usher in a mass wave of institutional adoption. And so, now that odds for such an approval are looking that much better, demand for bitcoin has built up in anticipation of the event.