Cryptocurrency, the Calm Before the Storm?

▲ Bitcoin, Cryptocurrency ©

As the cryptocurrency market has stagnated around $2.86 trillion for 8 consecutive days, and Bitcoin (BTC) has once again failed to settle above $85,000, a sense of caution akin to 'the calm before the storm' is growing. While it's premature to call this a bearish reversal, the risk of profit-taking has emerged as global bond sell-offs and dollar strength persist, and short-term holders' unrealized profits have reached a 21-month high.

According to investment media FXStreet on October 1 (local time), the total cryptocurrency market capitalization has remained around $2.86 trillion for 8 consecutive trading days. While price movements have been concentrated at the lower end of the box range this week, FxPro interpreted this not as a bearish reversal but as a result of increased caution due to heightened uncertainty and growing demand for the dollar. Among major coins in the last 24 hours, IOTA rose 7.8%, NEAR Protocol 4.6%, and AAVE 3.4%, while Internet Computer (ICP) fell 4.3%, Filecoin (FIL) 3.5%, and Ethereum Classic (ETC) 1.9%.

Bitcoin rallied on weaker-than-expected inflation data but failed to hold above $85,000. This is because the upward momentum quickly weakened due to continued global bond sell-offs. The strong dollar is also pressuring prices. FxPro specifically pointed to the ongoing bond sell-off as a concern, noting that while there have been instances where turmoil in traditional financial markets benefited cryptocurrencies, it is difficult to predict when market caution will turn into fear.

Looking solely at seasonal trends, expectations for October remain. Bitcoin rose 6.1% in September, closing at $83,700, defying the seasonally weak period for two consecutive months. October, dubbed 'Uptober,' has closed higher in 10 out of the past 15 years, with an average gain of 27.4% in up years and an average loss of 13% in down years. However, Bitfinex analyzed that the momentum of the recent BTC rally is weakening, and rising oil prices and US Treasury yields are pressuring investor sentiment.

On-chain indicators also showed signs of caution regarding a potential short-term correction. According to CryptoQuant, Bitcoin short-term holders' unrealized on-chain profits have surged to a 21-month high, increasing the risk of profit-taking and a short-term correction. In the altcoin market, the number of transfers moving coins to exchanges has reached its highest level since October 2025. An increase in coin movements to exchanges can typically be interpreted as preparing for a sale, thus adding to market caution.

Conversely, there was also an assessment that institutional investors' long-term interest continues. TD Cowen analyzed that institutional discussions are shifting from evaluating whether Bitcoin is worth buying to actual use cases and building related capital market infrastructure. Michael Saylor, founder of Strategy, stated that Bitcoin is entering a 'Gold Rush' period that could last until 2034, proposing the development of the BTC-collateralized bank loan market over the next three years as a key growth driver. In essence, it's a phase where short-term bond market instability and profit-taking risks are countered by long-term expectations for expanded institutional infrastructure.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*