The cryptocurrency market in October is on a bullish footing, with both Bitcoin and altcoins showing strong potential to extend gains, thanks partly to the expected monetary policy easing in the US, says digital asset fund manager Merkle Capital.
According to Woramet Chansen, investment advisor at Merkle, other key factors that could drive prices higher this month in addition to a Federal Reserve interest rate cut are supportive seasonality and renewed strength in altcoin markets.
The market widely expects the Federal Open Market Committee to trim the rate by a quarter-point to a range of 3.75% to 4% when it meets on Oct 28-29.
On Sept 17, the US central bank lowered its benchmark rate by 25 basis points and released a dovish dot plot, signalling more cuts ahead. Markets are now pricing in as many as four additional reductions through 2026, with most policymakers projecting a long-term terminal rate between 3% and 3.25% by late 2027.
Sustained lower borrowing costs are expected to inject liquidity into global markets, channelling capital towards risk assets such as cryptocurrencies, said Mr Woramet.
The second factor is seasonality, he said, noting Bitcoin rose more than 5% last month, only the fifth time since 2013 that September closed in positive territory.
Historical trends show that when September posts gains, October follows with further upside in six out of seven instances, he said. Moreover, Bitcoin has delivered positive returns in October 10 out of the past 12 years.
With the Fed pivoting towards a more accommodative policy, this seasonal tailwind adds conviction to bullish forecasts, said Mr Woramet.
The third driver is the broader market, as total crypto market capitalisation reached a record high in August, largely fuelled by institutional adoption of Bitcoin, according to Merkle.
More strikingly, altcoins excluding Bitcoin are retesting peak levels not seen in four years. In the previous cycle, once the altcoin market cap broke above its 2017 high, it surged more than 250% during 2021.
“Analysts believe a similar breakout this October could set the stage for a broad-based rally into the fourth quarter and potentially into 2026,” he said.
Merkle expects Bitcoin to test US$75,000-80,000 by year-end if momentum holds, while Ethereum could climb towards $4,000-4,200. Altcoins within the Ethereum ecosystem, as well as Web3-related tokens, are seen as potential outperformers, noted the asset manager.
“October could prove to be a defining month for digital assets,” Mr Woramet said. “Long-term investors may consider gradually increasing exposure to cryptocurrencies as global liquidity conditions, historical patterns and market structure all align for another bull cycle.”
