Bitcoin's "Golden Month" Continues with a Turbulent November

There are only two months left of this year. The public's attention is already turning to next year's trends.

In the cryptocurrency market, next year is the halving of Bitcoin (BTC). Before that, the market was excited in October as the SEC (U.S. Securities and Exchange Commission) was likely to approve a Bitcoin spot ETF.

Considering that the price of Bitcoin tends to rise about a year before and after the halving, it can be said that the time to prepare has finally begun in earnest, including for institutional investors.

The cryptocurrency market is getting through the tough period known as the "winter era." As proof of this, Bitcoin's return in October was up 27.3% compared to the previous month.

This may seem unusual, but in fact it is not. October is the most compatible "golden month" for Bitcoin in recent years.

According to data from the cryptocurrency statistics website coinglass, Bitcoin has recorded positive month-on-month growth for five consecutive years from 2019 to 2023. Looking at the data from 2013 to 2023, it has only been negative twice, in 2014 and 2018. The only month that has shown a similar performance is February.

On the other hand, September is not a good month. In stark contrast to the data for October, it has been negative for six consecutive years from 2017 to 2022. In the past three years, September is the month when problems occurred in DeFi and NFT, which were at the height of the boom, and interest calmed down.

Therefore, from another perspective, it shows that there are many investors who re-enter the market the month after the price falls. In recent years, there has also been a tendency for prices to fluctuate wildly from winter to spring. Just as there is a saying in the stock world that goes "buy in the fall and sell in the spring," a similar situation is beginning to form in cryptocurrencies, which are an asset class that is completely unrelated to them.

And what is of concern is the market trend in November. After a strong October, it will be interesting to see whether investors will buy more or close out their positions.

In terms of trends, the month of November is more likely to see double-digit percentage fluctuations than other months. Looking at the 10 years from 2013 to 2022, the only years in which the market settled into single-digit percentage fluctuations were 2016 and 2021. In 2016, it was a little after the second halving of Bitcoin, and in 2021, it was just after the Bitcoin Futures ETF was approved and the price hit an all-time high. In both cases, the market's overheating had calmed down and a wait-and-see mood was spreading.

In November, the largest increase in the past 10 years was in 2013, with a 449.3% increase. On the other hand, the largest decrease was in 2018, with a 36.5% decrease.

In 2013, the Cyprus crisis caused an increase in interest in Bitcoin as a way to protect assets. In addition, the price soared as demand and exposure increased dramatically, with Baidu, a major Chinese search site, accepting Bitcoin payments.

In 2018, a series of scandals, including hacking incidents, occurred one after another, and major companies such as Google banned cryptocurrency-related advertisements, and regulations were tightened, causing prices to fall from the beginning of the year. In November, the Bitcoin Cash (BCH) split also occurred, worsening the impression.

In 2023, speculations began to emerge about the approval of a Bitcoin spot ETF, and coupled with that expectation, I personally believe that the current situation is somewhat similar to that of September 2021, one month before the approval of a Bitcoin futures ETF.

Also, taking into account the SEC's current position and the status of the review so far, I think that a Bitcoin spot ETF will be approved as early as early November, and at the latest by January next year. Taking into account the review schedule, the approval in December is likely to be lower than in November.

If a Bitcoin spot ETF is approved, it is expected that the price of Bitcoin will naturally rise. If we only consider the listing when the Bitcoin futures ETF is approved and past market trends, it is quite possible that the fluctuation range will be double-digit percentages.

On the other hand, even if there are observations of approval, if there is no progress and investors are impatient, buying fatigue may occur and the movement to close positions may accelerate. Since December is originally a month when profit-taking sales are likely to occur, some investors may move ahead of the market.

Looking back at the quarterly data, we can see that Q4 (October to December) is the period when Bitcoin makes the most profit. Compared to Q1 to Q3, it rarely records negative values ​​and continues to steadily increase in the positive.

As mentioned above, October is a golden month for Bitcoin, and in December, profit-taking sales are likely to occur. Therefore, how much savings are made in October and November will determine the quarterly performance.

Behind these price trends is a mysterious causal relationship. Specifically, major incidents and events are likely to occur. The collapse of FTX, which went bankrupt last year and is still fresh in our memory, also occurred in November. In addition, the SEC's lawsuit against Ripple and the policy to promote blockchain in China were also announced from October to December. These events have a huge impact on the cryptocurrency market, for better or worse. In terms of this year, the existence of a Bitcoin spot ETF overlaps with this.

Bitcoin prices rose significantly in October, and the progress of the Bitcoin spot ETF will determine whether that momentum will continue into November. If a Bitcoin spot ETF is approved in November, it is possible that the price could rise by more than double digits. On the other hand, it is expected that the overheating will calm down in December and profit-taking selling will cause the price to temporarily drop.

The results will be known only after the lid is opened, but something will happen in the cryptocurrency market in Q4. When trading cryptocurrencies at this time, it would be a good idea to create a portfolio taking these trends into account.

Image: Shutterstock

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◉Shogo Kurobe
He entered the cryptocurrency industry in 2018. With experience studying writing and writing novels as a student, he is involved in writing, planning and editing articles on cryptocurrency and blockchain. He was appointed deputy editor-in-chief at J-CAM Co., Ltd. in April 2022, and is currently in his current position. He launched "Iolite" in March 2023.

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