October’s Bitcoin Anomaly: A Month of Mixed Signals

For many cryptocurrency enthusiasts and investors, October has historically been a month of optimism regarding Bitcoin. Over the last decade, this month has demonstrated a tendency toward bullish sentiment, boasting an average gain of about 22.5%. Factors such as post-summer liquidity, year-end portfolio adjustments, and growing demand from US investment products traditionally created a favorable environment for Bitcoin’s price to surge. This year, however, painted a different picture, marked by surprising volatility and cautionary echoes from previous downturns.

The Uptober Phenomenon

Oftentimes referred to as “Uptober,” this month had traders brimming with hope as Bitcoin’s value hit a striking new record above $126,000 in the initial days. The revived enthusiasm was palpable, as many speculated on whether the age-old trend would once again hold true. Yet, the unexpected took place—a sharp flash sell-off wiped out early gains within mere days. Unlike other come-and-go market assets, Bitcoin failed to regain its footing, leaving many market participants bewildered.

Echoes of 2018: A Cautionary Tale

The most intriguing aspect of this October was its stark resemblance to events back in 2018—a year many would prefer to forget in crypto circles. In that year, the month didn’t collapse per se; it simply stagnated. Once the typical seasonal tailwinds waned, November and December saw a drastic downturn, with Bitcoin plummeting by more than 36% in just one month.

This historical parallel raises concerns; when a historically strong month fails to lift prices, it often hints at underlying market weaknesses. Factors responsible for this worry can range from excess supply and diminishing demand to tightening macroeconomic conditions that exacerbate any existing market fragility.

The Market’s Exhaustion

This year, October presented similar undercurrents. Coming off a robust performance in the earlier months of 2025, the market appeared to have entered October fatigued. Heavy positioning of traders, uneven liquidity, and an influx of long-term holders cashing in their gains contributed to a fragile state. The variety of factors foreshadowing trouble cast a long shadow as the month progressed.

Unpacking the October Decline

Understanding why Bitcoin struggled in October requires delving into on-chain data. According to analytics firm Glassnode, long-term BTC holders began offloading their coins as early as mid-July. This gradual selling habit increased realized losses, marking a significant increase from approximately $1 billion a day to between $2 billion and $3 billion daily by early October.

Filtering this data further, it was revealed that holders from the 6 to 12 months cohort compelled the majority of recent sell pressure. Interestingly, their selling activity surged around the time Bitcoin reached its all-time high—a reality underscored by their average cost basis of nearly $93,000.

Not a Panic, but Profit-Taking

Crucially, the nature of the distribution this October did not echo previous capitulations or frantic market sell-offs. Instead, it appeared more like calculated profit-taking following a year of strong performance. As long-term holders leveraged any signs of price strength to liquidate their positions, the buying side weakened noticeably.

Diminished Demand from US Investors

As the selling intensified, the buy-side liquidity diminished sharply. A report from CryptoQuant noted a significant decline in US investor appetite across various sectors, including spot markets, ETFs, and futures, following the rally in late September. ETF inflows sank to less than 1,000 BTC per day, a stark contrast to the average of over 2,500 BTC during prior rallies.

Moreover, spot exchange premiums narrowed, and futures bases experienced retreat, suggesting that US buyers stepped back at precisely the moment when long-term holders escalated their selling.

Macro Context: A Wider Perspective

The broader macroeconomic backdrop also played a role in Bitcoin’s vulnerable performance in October. This year has been rife with global trade tensions, especially between the US and China, as well as regional unrest in the Middle East. Compounding the situation, the Federal Reserve maintained its stance on restrictive monetary policy, which has resulted in tight dollar liquidity around the world.

Researchers from Kronos described October’s retreat as a “liquidity strain, not a trend break,” indicating that Bitcoin still functioned as a relative flight-to-safety asset while other leveraged positions were liquidated.

Future Outlook: Cautious Optimism

As traders look ahead, the lessons from October cannot be understated. The last red October marked the beginning of a challenging year-end. The absence of seasonal support was typically accompanied by declining liquidity and ongoing distribution from long-term holders.

Interestingly, today’s market exhibits a healthier profile compared to 2018. With a deeper investor base, heightened stablecoin liquidity, and regulated products providing steady support, many experts believe the current setup resembles a market that is recalibrating rather than collapsing. Institutional accumulation continues, provided Bitcoin stays within the $107,000 to $110,000 range.

Nevertheless, the implications of an uncharacteristically poor October alter the landscape. When a traditional strong month cannot deliver the anticipated lift, the burden of proof shifts heavily onto bulls—demand will need to pick up significantly, and long-term holders will need to curtail their selling. The possibility of returning inflows amid a more stable geopolitical atmosphere could redefine the narrative, signaling a very different close to the year than what followed the tumultuous aftermath of 2018.

As the world watches and waits, Bitcoin’s trajectory hinges precariously on the balance between supply and demand, and the stories of old may yet shape the new.