Bitcoin closes October with its first monthly loss since 2018

Bitcoin's price broke a six-year winning streak in October, closing the month down more than 4%. 

Bitcoin is closing out October with a 4,8% drop, hovering around $109.000. This decline in the leading cryptocurrency's price marks its first monthly loss in seven years and its worst October performance since 2014. 

BTC's correction comes in a context of high macroeconomic sensitivity, just after the US Federal Reserve cut interest rates by 25 basis points on October 29. 

Although interest rate cuts are typically interpreted as a boost for risk assets like Bitcoin, Chairman Jerome Powell's comments about persistent inflation triggered a negative market reaction. More than $3.000 billion has flowed out of Bitcoin spot ETFs in a matter of days, indicating an ongoing reconfiguration of institutional appetite.

Bitcoin's pullback this month breaks a historical trend that had made October one of the strongest months for the cryptocurrency. Dubbed “Uptober“Due to its consistent upward trend, October has delivered an average return of 19,9% ​​since 2013, according to CoinGlass data. The last time BTC registered losses in this month was in 2018, with a drop of 3,8%. This year, however, the correction has reached 4,8%.”

An atypical October for Bitcoin amid structural milestones

The October drop coincides with the 17th anniversary of the Bitcoin whitepaper, published by Satoshi Nakamoto in 2008. In that time, cryptocurrency has evolved from an experimental proposal to become a digital asset class with a market capitalization exceeding $2 trillion. 

This exponential growth in Bitcoin's price since its inception has been accompanied by progressive institutionalization, with the entry of exchange-traded funds, derivatives, and a greater presence in diversified portfolios, including those of many governments. However, recent behavior suggests that Bitcoin is not immune to the macroeconomic cycles that affect the rest of the financial system.

The market's reaction to the Federal Reserve's comments reveals a growing sensitivity to monetary policy signals. Although Bitcoin originated as a decentralized alternative to the traditional banking system, its integration into broader financial structures has made it susceptible to global dynamics. The massive capital outflow from ETFs reflects an adjustment strategy by institutional managers, who are responding to inflation expectations and changes in the cost of money. This correlation with macroeconomic variables reinforces the idea that Bitcoin, beyond its disruptive narrative, is being treated as just another financial asset within the global ecosystem.

The cryptocurrency's monthly behavior also reveals maturation patterns. In its early years, Bitcoin exhibited extreme volatility and unpredictable movements. However, over time, it has developed more defined cycles, influenced by regulatory events, central bank decisions, and liquidity dynamics. 

November's challenge: Can Bitcoin break its historical pattern?

With October closing in the red, the attention of analysts and investors shifts to November, traditionally the strongest month for Bitcoin's price. 

Since 2013, the leading cryptocurrency has posted average returns exceeding 40% this month, generating high expectations among traders and analysts about what November will bring. However, given the current complex context, with mixed signals from the Federal Reserve, persistent inflationary pressures, and the recent outflow of institutional capital, experts are reshaping their outlook. While some analysts anticipate a rapid recovery, supported by Bitcoin's historical pattern in November, others are adopting a more cautious stance, fearing increased market volatility.

However, despite differing short-term perspectives, no one can deny that Bitcoin has come a long way since the publication of its whitepaper. In just under two decades, this cryptocurrency has gone from a fringe idea to a key player in the global financial system. Therefore, temporary price dips do not diminish its appeal or its potential. Bitcoin remains a benchmark that reflects the evolution and maturity of a market that continues to capture global attention.