The largest cryptocurrency is up 6.5% in October and was trading around $20,700 as of 8 a.m. in London on Saturday, while second-biggest Ether has risen 19%. Both tokens dropped in five of the previous six months, and bulls had been putting hope into this month as October has historically tended to be positive for crypto prices.
A recent rally doesn’t appear to have been caused by any one factor but is “largely driven by a more favorable backdrop for risk assets and short liquidations,” Greg Cipolaro, global head of research at NYDIG, wrote in a report. He cited $615 million of short futures and perpetual swap contracts getting liquidated on overseas exchanges for Bitcoin on Oct. 26-27, and $462 million of liquidations on Ether.
Bitcoin was stuck below $20,000 for much of September and October, but rallied above that level in recent days as tentative signs emerged the Federal Reserve might pull back on the pace of rate increases in coming months. Crypto has traded in tandem with risk assets such as the Nasdaq 100 in recent months amid Fed hikes and stubbornly high inflation.
Also helping crypto: Dogecoin’s 40% monthly gain amid anticipation that booster Elon Musk‘s purchase of Twitter might lead to initiatives that could spur the memecoin’s price.
“Digital asset markets have shown early signs of decoupling from tech,” Walter Teng, Fundstrat’s vice president of digital-asset strategy, said in a note Friday as top tokens gained in the past week while the likes of Meta Platforms Inc. and Amazon.com Inc. tumbled.