Author: Bootly

As October begins, the cryptocurrency market experiences a strong rebound. Multiple key indicators suggest that this month, referred to by investors as "Uptober," seems to be fulfilling the historical pattern of "October must rise."

Market Sentiment Reversal

In the first two days of October, the cryptocurrency market underwent a massive short squeeze. According to CoinGlass data, over $700 million in short positions were liquidated globally, including a $11.61 million Ethereum short position on Hyperliquid.

This round of short squeezing swept across the entire market, with all top 100 cryptocurrencies rising. The total market capitalization of cryptocurrencies has increased by over 6% since the end of September, surpassing $4.14 trillion on October 2, reaching a new high since mid-August.

This surge not only dispelled the weak gloom of September but also reignited investors' expectations for the year-end market.

As a barometer, Bitcoin (BTC) led this rebound, rising by as much as 10.3% over the past four days, currently reported at $120,500, marking a new 40-day high.

Meanwhile, Bitcoin ETF inflows reached the highest level since mid-September. According to Farside Investors data:

• Bitcoin ETFs attracted a net inflow of $675.8 million on Wednesday;

• Among them, BlackRock's IBIT fund alone attracted $405.5 million in a single day;

• Fidelity's FBTC fund attracted $179.3 million;

• Bitwise's BITB fund attracted $59.4 million.

Notably, this marks the third consecutive trading day that Bitcoin ETF daily inflows exceeded $100 million. In just the first three days of this week, the cumulative inflow has exceeded $1.6 billion, while on September 26, the market saw a single-day outflow of $418 million.

Interest Rate Cut Expectations Rise, Funds Shift from "Safe Haven" to "Value Appreciation"

The latest ADP non-farm employment data shows that the U.S. lost 32,000 jobs in September, significantly below the market expectation of +52,000. The weak employment figures are seen as a signal of economic slowdown, leading the market to generally expect the Federal Reserve to cut interest rates again at the FOMC meeting on October 29. The current CME FedWatch tool indicates a 97.3% probability of a 25 basis point rate cut in October.

This suggests that the global liquidity environment is likely to become even more accommodative, and the combination of "rate cut expectations + declining U.S. Treasury yields + a weaker dollar" is the perfect soil for assets like Bitcoin and gold to strengthen.

Dovile Silenskyte, Head of Digital Asset Research at WisdomTree, stated: "Bitcoin possesses both 'safe-haven attributes' and 'growth asset potential,' resisting inflation like gold while also having growth characteristics like tech stocks."

On-Chain Data: Selling Pressure from Long-Term Holders Weakens, Bottom Range is Forming

According to Glassnode data, the short-term holder realized value ratio (STH-RVT) has been continuously contracting since May, indicating a cooling of short-term speculative behavior and that the market is entering a "healthy accumulation phase."

At the same time, the long-term holder net position change (LTH Net Position Change) has shifted to a neutral range, suggesting that the large-scale profit-taking wave is nearing its end.

These two data points point to one conclusion: Bitcoin is building new structural support in the $115,000 to $120,000 range, similar to the consolidation phase in March-April of this year.

If the current supply-demand structure remains stable, the market is very likely to see a breakout in mid-October.

JPMorgan Forecast: Bitcoin Could Target $165,000

JPMorgan's latest report indicates that Bitcoin is currently severely undervalued relative to gold.

The report estimates that, adjusted for volatility, Bitcoin should have about 42% upside potential; this means its theoretical price should be around $165,000; if it were to match gold ETFs and physical gold investments, Bitcoin's total market capitalization would reach about $3.3 trillion.

The report's author, Nikolaos Panigirtzoglou, Managing Director at JPMorgan, pointed out: "Since the end of 2024, the valuation gap has shifted from Bitcoin being overvalued by $36,000 to undervalued by $46,000."

In other words, investors are re-embracing the "Debasement Trade"—facing fiscal deficits, inflation, and geopolitical risks, they are allocating funds into scarce assets like gold and Bitcoin. If historical patterns hold, the October market often represents the most sustained upward window of the year. With supply-side pressures easing, capital returning, and policy turning points overlapping, Bitcoin may be gearing up to challenge a new target range of $160,000 to $200,000.

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