Are we interested in an Uptober Bitcoin and crypto market? Let’s look at the key factors

• Historically, the crypto market performs better in October and Q4 than in other months and quarters.
• Rising interest rates and the US election will play a key factor in how market participants react.
• Expectations by members of the crypto community for more growth in October could fuel buying pressure, leading to a self-fulfilling prophecy.

Bitcoin and the crypto market could recover in the coming days as “Uptober” is trending across multiple platforms of the crypto community since Tuesday. However, several key market factors could modify or strengthen the bullish bias among investors.

Uptober trend and historical market performance

The trend follows expectations that buying momentum could increase in October due to historically high crypto returns this month. According to data from Coinglass, Bitcoin has only recorded negative returns in October on just one occasion in the last ten years. The top crypto boasts an average October gain of 20.4% over the past ten years. The only month that comes close in the same period is February, with an average gain of 15.7%.

This also aligns with a historically positive quarter where Bitcoin has seen an average return of 81%, much higher than other quarters.

In addition, crypto analyst Ali Martinez noted that Bitcoin historically begins a “parabolic bull run” in October, its half-year.

As a result of high expectations of a market rally, investors may intensify their buying pressure in the coming days, leading to a self-fulfilling prophecy of an Uptober bull run.

The token unlocks for October

The crypto market will witness $3.46 billion worth of token unlocks in October across projects including Celestia, Solana, Worldcoin and SUI, according to Token Unlocks data. Token unlocking could lead to short-term bearish pressure in these cryptocurrencies if demand fails to catch up with supply. Therefore, investors may need to be on the lookout for the potential correction of tokens that are experiencing unlocks despite the Uptober trend.

Interest rates have reduced expectations

Since the Federal Reserve (Fed) cut rates by 50 basis points on September 18, the crypto market has been on a rally, with Bitcoin and other top coins posting double-digit gains. In his speech on Monday, Fed Chairman Jerome Powell hinted at the possibility of more interest rate cuts in November and December, which could fuel bullish sentiment in the market as the month progresses.

Open interest must increase

Open interest is the total number of unsettled contracts in a derivatives market. An increase in total open interest in the crypto market during an uptrend means traders are more confident that the trend can continue. Therefore, if open interest increases steadily in the coming weeks, an Uptober move is likely to occur. However, a decline in open interest could signal a turn of the tide to the bears.

Trump and Harris’ chances of winning the upcoming US election

Several members of the crypto community anticipate that a victory for Republican presidential candidate Donald Trump could spark a rally in the cryptocurrency market, given the increased attention the industry has received lately. Trump has said that if elected in the upcoming November election, he will replace Securities and Exchange Commission (SEC) Chairman Gensler — whose administration has overseen several lawsuits against crypto companies — if elected. The Republican candidate and his sons also launched a DeFi platform, World Liberty Financial.

Therefore, if the possibility of Trump winning increases in prediction markets like Polymarket, investors may consider allocating more capital to crypto assets.

On the other hand, Democratic candidate Kamala Harris has not expressed a clear position on digital assets, and many members of the crypto community have expressed doubts about how she will treat the industry. For example, several community members highlighted how the current Democratic administration has supported the SEC in its crackdown on crypto companies.

Therefore, an increase in the probability of a Harris win may negatively affect crypto prices this month.