Bitcoin Gears up for Moonvember. Is an Uptrend Guaranteed?

Bitcoin retraced on Thursday, shedding over 4%. It continued the downtrend on Friday and is currently down by almost 2%. The apex coin is heading for a bearish close to October.

Trading activity over the last 24 hours was heavily influenced by news of the Binance hack. The market began reacting after on-chain sleuths flagged a massive outflow from one of the exchange’s hot wallets late Thursday.

Initially, these individuals identified around $1.7 billion in outflows. However, as more details emerged, the estimated value of the affected assets rose to a whopping $6 billion. Although recovery efforts are ongoing, there is no guarantee that all the funds will be recovered.

While most of the decline occurred during the previous intraday session, traders are still grappling with the incident’s impact. Spot ETFs also recorded significant outflows during the previous day. Binance has since reassured customers, stating that it will cover the losses.

Nonetheless, the almost 6% decline serves as another reminder of the exploit. The latest incident also joins a series of notable events that have weighed on sentiment this October.

Technical indicators have since begun to reflect the latest downturn. It remains to be seen how prices will react in the coming days. Nonetheless, the tenth month has been quite eventful. Let’s review how BTC performed.

Bitcoin Sheds 8%

The apex coin dropped to a low of $76,320 a few hours ago and shows no strong signs of rebounding at the time of writing. This is the first time in more than thirty days that the asset has fallen to this level. Traders are still reeling from the losses recorded over the last 24 hours.

In derivatives, traders lost $1.65 billion, while liquidations on Bitcoin alone reached $541 million. Based on recent price movements, long positions were the biggest losers, accounting for more than 85% of the liquidated funds.

On the 1-week scale, BTC is heading for its most bearish close of the month. It is down 4%, marking its fourth consecutive weekly decline. In a nutshell, October has produced no positive weekly close despite the significant optimism at the start of the month.

On the monthly scale, the apex coin is heading for one of its most bearish closes in October. It is currently down almost 9% over the last thirty days. A close at the current price would mark its worst Q4 start since 2014. In other words, this could be Bitcoin’s worst October in twelve years.

However, the possibility of a bearish close is not entirely surprising, as the October outlook had already highlighted factors that could push prices lower. It compared September’s trajectory with those of previous months and concluded that upward momentum was weakening.

Another indication of a potential downtrend was the pattern on the monthly heatmap, which suggested that a decline could follow the three-month uptrend.

Away from prices, US BTC spot ETFs have recorded significant outflows over the last 29 days. Data from SoSoValue shows that two of the last four weeks ended with notable losses. The week starting October 9 was the worst, with netflows reaching -$681 million.

On the monthly scale, the investment funds are set to record their worst performance in four months. However, inflows improved during the previous week, with the positive trend extending into Thursday. It remains uncertain how ETF flows will develop in November.

What to Expect Next Month

November is Bitcoin’s most profitable month historically. The asset recorded its biggest one-month gain during the eleventh month, surging by a whopping 453% in 2013. Excluding that exceptional performance, the apex coin gains 36% on average every November, the highest among all months. April comes closest, with an average gain of 32%.

Source: CryptoRank

Given its reputation as the most profitable month for the asset, traders will enter November expecting prices to recover.

It is easy to conclude that an uptrend may begin, but there are several factors to consider. One such factor is a pattern on the monthly heatmap that is worth noting. Historically, a bearish October has often been followed by further declines in November.

The pattern has appeared on three occasions, suggesting that the same outcome could play out this year. However, it should not be treated as a certainty, as the heatmap also shows two occasions when the pattern failed. Based on these historical observations, there is a 60% chance of a notable decline in the coming month.

Nevertheless, the image also shows that a red October has often coincided with a bearish Q4. This trend played out in four of the last five instances in which October ended in the red. If history remains a guide, there is an 80% chance that the current quarter will end with significant losses.

Bitcoin Eyes $75k Rebound

The 1-week chart suggests that selling pressure may slow in November. Following a four-week downtrend, exhaustion could cause sellers to ease their activity in the coming week. However, this does not guarantee a massive uptrend. Based on previous price movements, the asset may instead enter a range-bound phase.

There is also a high likelihood that consolidation could last for most of the coming month. A closer look at the chart shows that, following significant declines similar to the one recorded this month, the apex coin has traded sideways for almost four weeks before surging.

On the other hand, the possibility of a notable uptrend is not zero. BTC recently rebounded around $76K, a support level it has held since August. Additionally, this level has served as a launchpad for previous attempts to reach $86K. If it holds in November, a retest of the $82K resistance becomes a possibility.

Adding to the importance of holding this level, a decisive move above $82K could see the asset recover to prices not seen in almost three months. The Bollinger Bands, meanwhile, suggest that a rebound around the middle band ($73K) may become possible if the current support fails.

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