Bitcoin Faces October Bottom Test Amid Fading Rally and Market Uncertainty

Bitcoin's Recent Rally May Be Fading

Bitcoin recently rallied above the long-standing $85,000 resistance level but is now showing signs of forming a potential October bottom.

Market Participants Watching US Midterm Elections

With the U.S. midterm elections approaching, market participants are watching whether the latest correction could mark a turning point for the largest cryptocurrency.

Conditions for a Bottom Improving

XWIN Japan and DeFi Asset Management said that these developments suggest conditions for a bottom are improving.

Confirmation Requires Sustained ETF Inflows and Stronger U.S. Spot Buying

Confirmation requires sustained ETF inflows, stronger U.S. spot buying, and continued demand recovery.

Market Stress Remains Elevated

Although most holders were still profitable, the significant share of supply at a loss suggests that market stress remains elevated.

Growing Weakness in U.S. Institutional Demand

A crypto data analyst, Maartunn, highlighted growing weakness in U.S. institutional demand, pointing to the Coinbase Premium Gap plunging to approximately -$107.

Bearish Pressure Surrounding Bitcoin

Glassnode confirmed the bearish pressure surrounding Bitcoin in their weekly market update.

Liquidations and Market Activity

CoinGlass data added further fuel to the fire, as they shed light on 169,781 traders being liquidated over the past 24 hours, resulting in total liquidations of $811.79 million.

Bitcoin ETFs Recorded Outflows

BTC ETFs recorded $65.40 million outflows on the 12th of October.

Bitcoin in an Accumulation-to-Neutral Phase

AMBCrypto highlighted that Bitcoin is in an accumulation-to-neutral phase rather than a confirmed bull run, suggesting that a more sustainable rally may still be ahead.