Here’s Why Crypto Prices Are Bearish in October, Traders Divest Into These 3 New Cryptocurrencies
Crypto prices are pulling lower on Monday as jitters surrounding the escalating Israel/Palestine conflict and its potential to spill over to major oil-producing regional neighbors like Iran send oil prices higher, raising inflation fears.
Bitcoin (BTC) was last trading close to $27,500, down over 1.5% on Monday, while Ether (ETH) was trading down more than 3% below $1,600 amid a risk-off tone to trade macro trade.
Adding to the sell pressure in the ETH market was a surprise $2.7 million sale of ETH tokens by the Ethereum Foundation on decentralized exchange Uniswap over the weekend.
Despite October’s history as a good month for crypto prices – as per bitcoinmonthlyreturn.com, BTC has averaged a 25% gain in October since 2010 – traders fear that this October could break the positive streak.
That’s because traditional asset markets are potentially sending warning signals.
Oil prices remain volatile near multi-month highs, with front-month WTI futures last around $86, which could push up near-term inflation, meaning higher interest rates for longer from the world’s major central banks like the Fed.
That, plus the ongoing strength of the US economy (as epitomized by last week’s stronger-than-expected US jobs data), means yields on US government bonds are trading close to multi-decade highs.
Bank of America analysts argued in a note to investors and clients over the weekend that when bond markets get this oversold – bond prices move inversely to yields, so when yields rise, it means prices have fallen – this typically foreshadows a major market “event”.
“Bonds oversold: Treasuries trading >5% below 200dma; note oversold sell-offs all coincided/foreshadowed "events”: Oct’87 crash, May’94 Tequila crisis, Jun’99 internet bubble, Mar’21
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