- Bitcoin could hit a market bottom in October ahead of U.S. midterm elections.
- Whale holdings remain near 3 million BTC as demand shows signs of recovery.
- Bitcoin gained 24.5%–92.3% after three midterms, but past returns do not prove a trend.
Bitcoin is approaching a potential market bottom in October as investors assess economic conditions ahead of the U.S. midterm elections.
The U.S. midterm elections, scheduled for November 3, could influence Bitcoin by shifting investor expectations for economic policy, financial regulation, and market conditions.
CryptoQuant author XWIN Japan suggested that the elections will reduce political uncertainty as results become clearer, encouraging investors to reassess their portfolios and increase exposure to riskier assets.
However, interest rates remain a significant concern. On October 12, prediction markets reportedly priced in roughly an 18% probability of a Federal Reserve rate hike in October. Meanwhile, Brent crude oil prices had fallen from $110 to around $103 per barrel, easing some earlier energy-market pressures.
Lower oil prices could ease inflationary pressures, while expectations of lower interest rates could support demand for riskier assets such as Bitcoin. Persistent inflation and higher borrowing costs continue to threaten the market’s recovery.
Three On-Chain Indicators Point to a Bitcoin Bottom
XWIN Japan also highlighted three on-chain developments indicating that selling pressure is easing. First, Bitcoin exchange reserves remain low despite a recent rebound. Lower exchange balances indicate that fewer coins are immediately available for sale on trading platforms.
Second, Bitcoin’s Apparent Demand has recovered sharply from deeply negative levels. The indicator measures changes in estimated demand relative to new supply. Its recovery signals improving demand conditions, although the metric remains below zero, leaving a full recovery unconfirmed.
Third, whale holdings have climbed to approximately 3 million BTC and remained elevated throughout the price correction. This trend suggests large holders have maintained positions or accumulated Bitcoin despite market weakness.
Together, these indicators support the case for a developing market bottom. The analyst identified these conditions as the key signals that Bitcoin’s correction has ended and a durable recovery is underway.
Bitcoin Post-Midterm History Delivers a Bullish but Limited Signal
In a separate analysis, the analyst examined Bitcoin’s historical performance following U.S. midterm elections and compared it with broader financial market trends.
The author noted that the S&P 500 rose in all 19 twelve-month periods following midterm elections since 1950, delivering an average gain of 15.4%. The third year of a U.S. presidential term has also historically delivered the strongest equity-market performance.
Bitcoin gained 24.5%, 44.9%, and 92.3% in the twelve months following the 2014, 2018, and 2022 midterm elections, respectively.
However, Bitcoin also suffered a 45.5% decline in the first month following the 2018 election. This drop demonstrates the volatility that persists even when longer-term historical trends appear favorable.
Meanwhile, the analyst cautioned that three Bitcoin observations do not establish a reliable statistical pattern. Historical returns also do not prove that midterm elections directly drive cryptocurrency prices higher.
What Bitcoin Traders Should Watch Next
Recovering on-chain demand, elevated whale holdings, and the approaching midterm elections support cautious optimism. Nevertheless, Bitcoin needs sustained buying activity to confirm a durable market bottom.
Traders should monitor U.S. spot Bitcoin ETF flows, Treasury yields, oil prices, and changes in Apparent Demand. Regulatory developments following the elections also remain important drivers of cryptocurrency market sentiment.
XWIN Japan’s analysis points to October’s correction as a foundation for a later advance rather than an outright rejection of a bullish finish to the month.
The central question is whether improving on-chain conditions will translate into sustained buying. The midterm elections present a potential catalyst for shifting investor sentiment, but Bitcoin’s next major move ultimately depends on liquidity, demand, and the broader economic environment.
Related: Bitcoin Price Faces Volatility as US CPI, PPI Data and Fed Chair Warsh Speech Loom
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