The crypto markets experienced the largest liquidation wave in history last week. Yet analysts remain optimistic, claiming that October – dubbed “Uptober” – may still bring growth. The total cryptocurrency market capitalization quickly recovered and again surpassed the $4 trillion mark.

“After the biggest liquidation wave in crypto history, I was convinced October would be a month of losses,” admitted popular crypto podcaster Scott Melker. “Honestly, the fact that markets are holding up is almost a small miracle. I don’t think this marks the start of a new downtrend.”

While the weekend saw a sharp drop, a rapid rebound followed. The total market value rose back to $4 trillion. Bitcoin, however, failed to stay above $111,000 and slipped slightly on Tuesday. Analysts say this doesn’t indicate a trend reversal.

Short-term volatility is normal, long-term optimism prevails

“Volatility is part of the journey toward the market cycle peak,” said Tim Sun, lead researcher at HashKey Group. According to him, excessive pessimism is unnecessary. In the long run, key factors will include monetary easing, reduced geopolitical tensions, and improved liquidity.

October earned the nickname “Uptober” because bitcoin has almost always strengthened during this month. Over the past 12 years, it has ended October in profit ten times. This year, it’s slightly down (−0.6%) so far, but historical data shows the strongest rallies often occur after October 15.

• October 2024: +16% in the second half of the month

• October 2023: +29% in the second half of the month

• October 2020: +18% after October 15

If history repeats itself, the second half of October could be very interesting for the markets.

Positive macro signals emerge

Geopolitical factors are also helping calm the markets. Fears of a trade war between the US and China, which contributed to the weekend’s drop, are starting to fade. The White House confirmed that President Donald Trump and Chinese President Xi Jinping will meet soon.

“Trade is not a zero-sum game. Both sides ultimately seek a larger share of the gains, so the outcome will likely be milder than markets expect,” Sun concluded.

Other supportive factors include expected interest rate cuts by the US Federal Reserve and the so-called “debasement trade” – investors betting on the weakening of traditional currencies.

Sources:

https://cointelegraph.com/news/crypto-liquidation-event-unlikely-derail-bullish-uptober-say-analysts

https://x.com/scottmelker/status/1978213424518619160

https://www.yahoo.com/news/articles/trump-xi-meeting-still-trade-215116147.html