Bitcoin’s 6% drop since Sept. 30 should be seen as an opportunity for investors to stack more BTC, says Quinn Thompson, the chief investment officer at Lekker Capital.
In an Oct. 3 post on X, Thompson said buying Bitcoin (BTC) in its current price range of $61,000 is a “no-brainer,” adding that the “macro backdrop” of price action for the crypto asset has changed significantly compared with past price drops.
Source: Quinn Thompson
He attached a chart of Bitcoin’s price action from March 5 this year, when BTC notched a new all-time high of $73,700.
Thompson highlighted three previous “similar setups” in which the price of Bitcoin plummeted and subsequently tumbled well below its 200-day moving average — a key technical indicator used by traders to gauge the mid-term strength of certain assets.
This time, however, BTC bounced sharply off the technical level, which Thompson said showed a “clear invalidation on the back of a 180-degree shift in the macro backdrop,” hinting that prices may soon swing upward.
“I don't usually give very short-term views, but seems like a no-brainer to be bidding this area.”
Escalating geopolitical tensions in the Middle East spooked markets earlier this week, with risk assets like Bitcoin selling off sharply as Iran took military action against Israel.
Growing concerns over the strength of the US economy and uncertainty around the outcome of the US election in November have also weighed on risk assets.
Related: Geopolitical tensions, US elections favor Bitcoin ‘debasement trade’: JPMorgan
Meanwhile, mentions of Uptober” — a nickname given to October for its historically bullish crypto price action — have plummeted across social media as markets continue to pull back.
In line with Thompson, other analysts also say the lack of recent optimism presents an opportunity for a short-term bounce.
“Uptober excitement wanes as the market dips, which does open the door for a rebound. Whether the bigger downtrend is over remains to be seen,” said Santiment founder Maksim Balashevich.
While October has historically been a strong month for returns — with an average gain of over 20% in the last 11 years — most of the gains happen later in the month.
October and November are typically the best months for Bitcoin price performance. Source: CoinGlass
In the first half of October 2023, Bitcoin fell 7% to $26,650 but surged almost 30% in two weeks to close the month at $34,500, leading some traders to entertain the possibility of a sharp move upward later this month.
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