Bitcoin (BTC-PKR) has surged past the $118,000 mark, extending its rally through October, in a move analysts are linking to a mix of macro dynamics, including a weakening U.S. dollar and fears of a potential U.S. government shutdown.
If you are not familiar with the crypto lingo, October has historically been bitcoin’s strongest month, rising in 10 of the past 12 years, according to Compass Point Research, leading many in crypto markets to refer to the month as “Uptober.”
According to market watchers, a primary catalyst for the surge is the U.S. dollar’s decline, which makes dollar-denominated assets, including Bitcoin, more attractive globally. As capital moves away from the softer dollar, it is increasingly seeking returns in riskier assets, with crypto being a major beneficiary.
The ongoing budget negotiations in Washington and the threat of a government shutdown are also playing a significant role. Historically, during periods of fiscal uncertainty, investors have sought alternative hedges to traditional assets. Bitcoin’s narrative as “digital gold” is gaining traction, with some viewing it as a potential safe haven.
Adding to the positive sentiment is a period of relative calm in broader macro data and a more stable regulatory environment in the U.S. This has allowed market participants to look past short-term policy noise and focus on sustained upward trends.
“I believe that the next wave of crypto adoption will come from stablecoin adoption. And that’s going to be very positive for crypto overall,” Samir Kerbage, chief investment officer at Hashdex told the media. “This is a trend that might take 6 months to one year to start to reflect on prices.”
Despite the strong performance, risks persist. A sudden reversal in the dollar’s trend, potentially triggered by surprising hawkish monetary policy, could quickly undermine the rally. Other factors that could dampen sentiment include increasing profit-taking by traders, a slowdown in ETF inflows, or any negative signals from U.S. regulators.
Technically, the cryptocurrency could face resistance in the $122,000–$125,000 range. If its momentum fades, Bitcoin might retreat to test support levels near $110,000 to $108,700.
Bitcoin’s rally has fueled a wider upswing in the crypto market, with altcoins and meme tokens also showing gains. Some traders believe the move signals a broader rotation of capital into smaller-cap cryptocurrencies and decentralized finance (DeFi) sectors.
However, market participants should brace for heightened volatility. The rapid movement could lead to short-squeezes and liquidity imbalances, potentially exaggerating price swings in either direction.