Bitcoin (BTC) may still preserve its traditionally strong October growth, as on-chain data point to the formation of a local bottom in the BTC price. On Monday, the crypto analytics platform CryptoQuant published a new analysis indicating that the state of the blockchain is in a stage of “cautious optimism.”
Bitcoin continues to face mixed macroeconomic and geopolitical headwinds, including 24-year highs in U.S. bond yields, rising oil prices, and declining capital inflows into exchange-traded products. These conditions have dampened optimism about a strong October rally for bitcoin.
“Signs of a possible bottom are now emerging,” wrote XWIN Research Japan, a contributor to CryptoQuant.
Since the beginning of October, the situation has shifted in favor of cryptocurrencies and risk assets. XWIN points to reduced expectations of Federal Reserve rate hikes until 2027, which increases the likelihood of greater capital inflows. At the same time, markets are awaiting greater clarity on the U.S. domestic political situation following the upcoming midterm elections.
“A reduction in political uncertainty after the vote could help investors reassess their asset allocation,” XWIN continued.
BTC reserves on exchanges, apparent demand, and large holders’ assets give XWIN reason to believe that the local October low may have already been reached.
BTC supply on exchanges declined from 2.726 million on September 20 to 2.68 million as of Tuesday, a 1.7% decrease, despite a slight increase over the past week.
At the same time, the aggregate assets of large investors, or “whales,” continue to exceed 3 million BTC. This group of investors’ drive to reduce their holdings has persisted, despite the BTC/USD rate falling from $87,000 on October 2 to nearly $80,000 on October 8.
Bitcoin demand data keeps October sentiment optimistic
The apparent demand metric, which compares the volume of newly mined BTC with changes in inactive supply, indicates that overall demand remains stable.
Throughout 2026, this metric has remained negative, with a brief period of positive 30-day values in the second half of August. Since then, demand has remained negative but recovered this week to a level close to neutral.
“These events point to improving conditions for a bottom to form. To confirm this, sustained ETF inflows, stronger spot buying in the U.S., and a further recovery in demand are needed,” the XWIN report states. “‘Uptober’ does not necessarily mean continuous growth: a correction could lay the groundwork for the next rally.”
This week, crypto asset manager Bitwise said that on-chain data for the third quarter point to a “crypto spring” following a historically significant rally. Meanwhile, CryptoQuant CEO Ki Young Ju announced in late August what he believes is the start of a new crypto bull market, declaring the bear market “over.”
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