Bitcoin Seasonal Pattern at Risk Amid Inflation Fears and ETF Outflows
Key Summary
Bitcoin has experienced a 4% decline in October, threatening to snap its long-standing seasonal pattern of a positive October. The cryptocurrency's decline is driven by forced liquidations, inflation concerns, and ETF outflows, with a close below $84,856 on October 31 potentially marking back-to-back red Octobers for the first time since 2017.
Historical Context of Bitcoin's Seasonal Pattern
Bitcoin's seasonal pattern has been a topic of interest for investors and analysts. Since 2017, the cryptocurrency has experienced seven positive months and only two negative ones in October. The previous year's record high of $126,296 in 2025 also broke a six-year streak of green Octobers.
Factors Contributing to Bitcoin's Decline
Several factors have driven Bitcoin's decline this month. Forced selling has played a significant role, with liquidations occurring when traders must sell positions due to losses exceeding their collateral. Rising oil prices and geopolitical tensions have contributed to the selling pressure. Inflation concerns have also weighed heavily, with the Consumer Price Index rising 0.6% in September and a year-over-year increase of 3.7%. The Federal Reserve's decision to raise interest rates in September has also influenced market sentiment, with futures traders pricing in a 47% chance of another rate hike on October 28.
Notable fund selling, particularly from spot Bitcoin ETFs, has also been a significant contributor to the decline. These funds saw a total outflow of $487 million on October 7, $244 million the following day, and another $261 million on October 14, before a small inflow of $5 million on October 15. This contrasts sharply with September, when these funds saw a significant inflow of $999 million on September 21 alone.
Outlook for Bitcoin's October
While Uptober isn't officially over, Bitcoin's chances of finishing the month positively look slim. The seven previous green Octobers since 2017 offer hope, but those months often occurred in more favorable market conditions. For Bitcoin to close October positively, it needs to stay above its low of $79,676, ETF flows must shift back to steady inflows, and the Fed must decide against raising rates on October 28. Even if these conditions align, Bitcoin will have only three days after the Fed meeting to push past its October 1 level of $84,856.