Introduction: From the Lows to the Bull Market, the Annual Cycle of Bitcoin

On October 11, 2023, the price of Bitcoin touched $26,500, marking the lowest point after a long bear market and intense battles between bulls and bears in October last year. At that time, the market was filled with panic and skepticism about cryptocurrencies, and investors were all at a loss: would the bull market ever return? It was in such a low point that the approval of a Bitcoin spot ETF news ignited new hope in the market. The passage of the ETF symbolized mainstream capital's recognition of cryptographic assets, and the entry of institutional funds gave the market new momentum. The price of Bitcoin soared, embarking on a new round of the bull market journey.

Time flies, and today is October 10, 2024. It has been exactly one year since the lowest point of Bitcoin last year. Bitcoin now stands on the support level of $60,500, having gone through the ups and downs of this year, the market is once again full of suspense: will this October once again reproduce the brilliance of "Uptober"?

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The Cyclical Progress of Bitcoin: A Story of Ups and Downs

October-December 2023: The Fake News Storm and the Carnival Triggered by ETF Expectations

The commotion of fake news: In mid-October 2023, Cointelegraph published a news about the approval of Bitcoin spot ETF, which quickly spread in the market. This news triggered a short-term market carnival, with prices rising rapidly, affecting many cryptocurrency communities and mainstream media. However, this news was soon proven false, causing the market to fall back into turmoil, and the price of Bitcoin also fell rapidly. This incident is a wake-up call for investors - in the era of information overload, it is particularly important to stay alert and rational.

The real power of ETF approval: Although the impact of fake news was short-lived and chaotic, the subsequent news about the actual progress of Bitcoin spot ETF approval was the real driving force that pushed market sentiment from a low point to optimism. The price of Bitcoin rose from $26,500 to $40,000, and investors' expectations for the passage of the ETF became the driving force for this rise. The ETF symbolizes a big step for Bitcoin to move from a "marginal asset" to a mainstream financial asset, and this market sentiment caused a large amount of funds to quickly flow into the market, pushing Bitcoin to achieve a significant increase in the short term.January 2024: The "roller coaster" market following the approval of Bitcoin ETFs

Formal approval of ETFs and a brief celebration: On January 11, 2024, the U.S. market finally welcomed the formal approval of Bitcoin spot ETFs. This event was like igniting a raging fire in the cold winter, causing the price of Bitcoin to quickly rise from $42,000 to $48,000. The market was filled with optimism in just a few days, and the approval of the ETF was seen as an important sign of Bitcoin's legitimacy and compliance, attracting the attention of a large number of institutional investors.

Grayscale's sales hit market sentiment: However, the celebration did not last long. Grayscale, the world's largest cryptocurrency asset management company, sold a large amount of Bitcoin during this period, becoming one of the important factors hitting the market. Grayscale holds a large amount of Bitcoin, and its Grayscale Bitcoin Trust (GBTC) has a huge impact on the market. Due to the need for market liquidity and the need to adjust the fund structure, Grayscale chose to sell multiple times at the high price of Bitcoin in January. These sales increased the selling pressure in the market, causing the price to quickly rebound. In the end, Bitcoin fell to $38,000 in late January, with an adjustment range of about 20%. This roller coaster market made many investors who chased high feel the cruelty of the market.

February-March 2024: ETF inflows and the carnival of meme coins

Continuous inflow of funds, Bitcoin hits a new high again: After the sharp drop in January, Bitcoin ushered in a new round of rises in February and March. The continuous inflow of funds into Bitcoin spot ETFs became an important driving force for this rise. Institutional investors entered the market through ETFs, bringing a large amount of new funds and enhancing market liquidity and stability. The price of Bitcoin broke through $50,000 in just a few weeks and climbed all the way to $73,000, setting a historical record.

The carnival of meme coins: A situation where a hundred flowers bloom: This wave of rises is not only the recovery of Bitcoin but also the recovery of the entire cryptocurrency market, especially in the field of meme coins. From the classic Dogecoin (DOGE), Shiba Inu (SHIB), to the rising star PEPE, and various new types of meme coins on the Solana chain, these coins quickly became market hotspots driven by social media. The prices of meme coins rose significantly in February and March, and many short-term speculators entered the market, bringing additional vitality to the market. The outbreak of these meme coins reflects the warming of market sentiment - under the continuous inflow of ETF funds, the market's demand for high-risk assets increased, making meme coins also usher in the moment of "a hundred flowers blooming".

April-October 2024: A half-year long wide range of fluctuationsHowever, the fervor of the market will not continue indefinitely. From April to October, Bitcoin entered a half-year period of wide-range oscillation, with prices fluctuating repeatedly between $50,000 and $70,000. This fluctuation was not accidental but the result of the combined effects of various factors.

Firstly, there are geopolitical factors. The increase in global uncertainty, especially conflicts in certain regions and trade frictions between major powers, has reduced investors' risk appetite. Secondly, the inflow of funds into Bitcoin spot ETFs has slowed down, no longer providing the market with a strong push as it did initially. In addition, the profit-taking sales by whales have also put pressure on the market during this phase. Many early entrants have chosen to take profits at high levels, gradually dispersing their shares to small and medium investors. This redistribution of shares has increased the market's uncertainty and volatility in the short term.

From the perspective of Gann's time theory, this wide-range oscillation of Bitcoin fits the time cycle law in a bull market. In Gann's theory, significant price fluctuations usually occur at important time nodes, and the wide-range oscillation over the past six months is actually accumulating energy for the next major breakthrough. After the bull market starts, the market usually goes through a process of correction and accumulation, and the fluctuation of Bitcoin over the past half year is a typical manifestation of this theory.

Historical data shows that Bitcoin usually sees a significant increase 6 to 12 months after the halving. This means that if historical patterns continue to play out, the market is likely to see a new round of strong growth from the end of 2024 to the beginning of 2025. The current wide-range oscillation may be preparing for this large cycle trend.

From the perspective of Wyckoff's accumulation theory, when Bitcoin fell to $49,000 in September 2024, it completed a typical "shaking" action. This action is called the "final shake" in Wyckoff's theory, which means that at the end of the accumulation phase, the main force creates a panic-induced decline to shake out the unstable shares in the market, thus clearing the way for the subsequent rise. The decline in September, accompanied by a significant increase in trading volume, quickly rebounded after falling to $49,000, indicating that the main force has completed the shake, the market's share concentration has increased, and the market is ready for the subsequent upward trend.

Bitcoin's On-Chain Data and Share Analysis

On-chain data: Who is buying, who is selling?

According to Glassnode's data, the transaction volume on the Bitcoin chain has increased, and the number of active addresses has also risen during price fluctuations, reflecting the increased activity of short-term traders. The hash rate remains high, showing miners' continued confidence in the market. The number of large addresses holding more than 1,000 BTC (whale addresses) has decreased, indicating that some large investors have chosen to take profits or adjust positions during price fluctuations. On the contrary, the number of small addresses holding 0.1-10 BTC has increased, showing that more retail investors are entering the market. The net inflow of Bitcoin into exchanges has increased, suggesting that investors may prefer to sell their holdings during price adjustments.Overall, the decline in this bull market has been relatively small, but it is consistent with the historical upward trend of bull markets. This highlights the similarities and relative resilience of the current cycle. The cost basis for short-term holders is $62,500, and the positioning and expenditure behavior of short-term holders have greatly improved. Given that the spot price is in a delicate position relative to the cost price of a large circulating supply, this may help to shift the balance back in favor of the bulls.

Decrease in Coinbase Premium: A sudden drop in demand in the US market

The Coinbase premium measures the spot price difference between Coinbase's BTC/USD and Binance's BTC/USDT pairs. Previously, a positive premium led investors to increase their bets on the sustained upward momentum. As of October 9th, the premium turned negative again, reaching the lowest level since early August. The disappearance of the positive premium indicates a waning optimism among US institutional investors about the current price.

Bitcoin ETF Data Analysis

According to the analysis by cryptocurrency KOL @Phyrex, the inflow of Bitcoin was interrupted at the beginning of October. There were just two consecutive days of positive inflows, but on October 9th, it turned into a net outflow, albeit only 33 Bitcoins. This is enough to show a decline in the overall buying sentiment. This interruption in capital inflow is closely related to the increasing number of market participants adopting a wait-and-see attitude.

In terms of selling, GBTC (Grayscale Bitcoin Trust) is no longer the main selling force; Fidelity has now become the primary seller. Fidelity has significantly increased its selling volume in BTC recently, selling 787 Bitcoins in the past 24 hours. Similarly, Fidelity's selling volume in Ethereum (ETH) is also substantial, indicating a generally cautious attitude towards crypto assets.

In contrast, GBTC's selling has been relatively moderate, with only 9 Bitcoins sold in the last 24 hours, while BlackRock investors continue to maintain a certain interest in buying. BlackRock continues to slightly increase its Bitcoin holdings, and VanEck and Invesco also have small inflows, while other ETF holdings remain essentially flat, with no significant increase or decrease in positions.

It is worth noting that although the release of non-farm employment data once boosted market sentiment, causing a brief rebound in Bitcoin prices, the overall investor sentiment remains poor. The short-term favorable data did not effectively sustain, but instead quickly dissipated when sentiment slightly weakened. In terms of liquidity, a single interest rate cut is not enough to significantly increase market liquidity, and investors' risk appetite has not significantly increased. In the short term, it may still need to rely on macro events such as elections to further stimulate the activity of liquidity in the market.The following October: Suspense and Opportunities Coexist

Impact of Macroeconomic Data and Federal Reserve Policy

The minutes of the Federal Reserve's October meeting, along with the CPI and PPI data to be released on October 10th and 11th, will be key focal points for the market. These data will directly influence expectations for the Federal Reserve's monetary policy. If inflation data comes in below market expectations, the market may anticipate future rate cuts, which could be bullish for high-risk assets, including Bitcoin. However, if the data exceeds expectations, market nervousness could put pressure on Bitcoin prices.

The Mystery of Satoshi Nakamoto's Identity: The Impact of Sentiment-Driven Influence

Recently, a documentary on HBO reignited the debate over "who is Satoshi Nakamoto," even listing Peter Todd as a suspect. While this discussion is intriguing, it has also shifted part of the market's attention to this dramatic topic. For the long-term value of Bitcoin, its decentralized and censorship-resistant characteristics are far more important than the identity of its founder. The market's long-term focus remains on technological development and changes in the macro environment.

Summary: Can October Recreate the Glory of "Uptober"?In this bull market cycle, from the trough in October 2023 to the volatility in October 2024, Bitcoin has experienced a rollercoaster journey. Currently, Bitcoin is once again standing on the support level of $60,500, facing not only the pressure of macroeconomic data but also a reevaluation of the market's long-term direction. Historically, October has often been Bitcoin's "Uptober," with the market seemingly always finding reasons to rise. However, this year's market has been more cautious and watchful, with a suspenseful October ahead. Investors may need to stay calm, closely monitor key data, and be prepared for potential market changes.