Bitcoin Faces Challenges in October Despite Q4 Recovery Hopes

After a strong Q1 where Bitcoin nearly reached $74,000, investor optimism has waned as the cryptocurrency has steadily declined. However, entering a historically favorable quarter keeps hopes alive.

Bitwise’s Chief Investment Officer, Matt Hougan, indicated that Bitcoin could hit $80,000 by Q4 2024, contingent on key factors. He highlighted the importance of the U.S. elections, noting that a divided Congress could create a more supportive environment for crypto, with current odds suggesting a 20% chance of a Democratic sweep versus 32% for Republicans.

Macroeconomic conditions are also crucial, with expectations for a 50 basis point rate cut from the Federal Reserve and additional fiscal stimulus from China.

Hougan cautioned that unexpected setbacks, such as legal issues or security breaches, could hinder Bitcoin’s performance. A positive market sentiment, similar to the ‘DeFi Summer of 2020,’ could enhance Bitcoin’s prospects.

Traditionally, October has been a strong month for Bitcoin, averaging a 23% gain. However, this year has started poorly, with Bitcoin experiencing its worst October opening since 2013, falling 6.5% from above $64,000 to around $60,100. Although it rallied to nearly $65,000 by October 7, it has since dropped back below $61,000.