As we head into the fourth quarter of 2024, Bitcoin (BTC) options activity is heating up, reflecting an increasingly risk-on sentiment among traders. As October rolls around, the Bitcoin community is excited since this has been Bitcoin’s favourite time to shine in the past. In fact, the buzzword ‘Uptober’ is making a comeback.
Research indicates that Bitcoin’s price cycles usually begin to take off 170 days following a halving and peak 480 days later. Since the most recent halving occurred approximately 170 days ago, many think that this would be the beginning of a significant upward rise for Bitcoin.
Increased BTC options activity signals optimism among traders
Recently, there has been an increase in options trading volume, which suggests that traders are strategically positioning themselves to profit from market fluctuations. One interesting trend is the surge in trading volumes for BTC options expiring at the end of October.
The change in behavior reflects strategic adjustment by traders who are expecting price movements ahead. The surge in options activity coincides with the U.S. Federal Reserve’s recent announcement of a rate-cutting cycle, which began this month. The initial 50 basis point cut has injected optimism into the market, leading traders to speculate on further cuts before the year ends. This has prompted increased trading volumes on contracts with strike prices above $100,000, particularly for December 27 options.
The effects of a weaker dollar and the Fed’s decision to ease quantitative tightening measures haven’t fully shown up yet; however, market sentiment seems to be improving as traders adjust their positions.
Political shifts ignite BTC discourse as Trump and Harris embrace cryptocurrency
The 2024 U.S. election race is fueling BTC’s fire with both of the major contenders entering the cryptocurrency discourse. Former President Donald Trump, once a crypto skeptic, now supports digital assets. He started taking cryptocurrency donations for his campaign earlier this year in May, which immediately attracted the attention of the cryptocurrency community. In June, Trump expressed his support for Bitcoin miners and expected that domestic mining would account for the remaining Bitcoin supply, further solidifying his pro-crypto attitude.
At the end of July, Trump made headlines by attending the Bitcoin Conference in Nashville as the main guest, where he proposed creating a national strategic reserve of BTC. To top it all off, Trump solidified his involvement in the cryptocurrency field on September 16 when he introduced “World Liberty Financial,” his own decentralized finance initiative.
Conversely, Vice President Kamala Harris has been courting the cryptocurrency industry as well, albeit with greater prudence. She had been silent for a while, but now she is speaking up, indicating that she is becoming more comfortable in the industry. In fact, just recently, her team released a policy document that promised to “encourage innovative technologies like AI and digital assets. This move signaled a nod toward the importance of cryptocurrencies like Bitcoin.
Analysts forecast bullish trends despite Bitcoin’s recent decline
According to CoinMarketCap data, a “long squeeze” in the perpetual futures market caused the price of Bitcoin to drop by more than 3% on the previous day. That led to $49 million in long-position liquidations.
CryptoQuant indicates the futures market has been overheated, with open interest exceeding $19 billion. According to Coinglass statistics, BTC values decreased whenever that occurred.
As Bitcoin enters October, many crypto experts and macro analysts are weighing in on what could unfold in the coming days. One of the main themes analysts are focusing on is the surge in global liquidity, which is a key driver for Bitcoin. Julien Bittel, Head of Macro Research at Global Macro Investor, notes that global money supply (M2) has begun to rise again, a historically positive sign for Bitcoin.
Julien suggests that BTC tends to react quickly to such liquidity injections, and given the current macro environment, we may be nearing what he calls a “last-chance saloon to go long before The Banana Zone really kicks in.” Another notable crypto analyst, Michaël van de Poppe, has set an extremely bullish target for Bitcoin. He predicts that by the end of 2024, Bitcoin could trade between $90,000 and $100,000.
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