For over a decade, October has been Bitcoin's reliably bullish "Uptober," delivering average gains of 22.5% driven by seasonal liquidity and increasing US investment product demand. Confidence was high this year, and Bitcoin even surged past $126,000 in the first week. However, a swift sell-off erased these gains, and unlike other risk assets, Bitcoin failed to recover. This resulted in October closing lower, marking its first negative performance in seven years and reminding the market that slogans don't dictate price.
Echoes of 2018: Underlying Weakness Revealed
This "red October" closely mirrors 2018, when Bitcoin's usual seasonal rally simply stalled. The fading tailwind led to sharp declines in November and December, with Bitcoin losing over 36% in November alone. The key takeaway: when a historically strong month fails to lift prices, underlying market weakness is already in play. This can stem from excess supply, dwindling demand, or tightening macroeconomic conditions.
This year, the market entered October exhausted. After a strong first three quarters, traders were heavily positioned, liquidity was uneven, and long-term holders began systematically taking profits at every sign of strength.
On-Chain Data: A Flood of Profit-Taking
On-chain data clearly explains Bitcoin's October struggle. Glassnode revealed a consistent spending spree by long-term BTC holders since mid-July. Realized selling surged from approximately $1 billion per day to between $2 billion and $3 billion per day by early October.
"Filtering by age cohort reveals that 6m–12m holders drove over 50% of recent sell pressure—especially during the late stages of the top formation. Around the $126,000 ATH, their spending exceeded $648M/day (7D-SMA); over 5x their baseline earlier in 2025."
This wasn't panic; rather, it was a gradual, persistent distribution, with selling into every market bounce. Most of these coins were acquired between $70,000 and $96,000 (average $93,000), indicating calculated profit-taking after a strong year.
Thinning Buy Side & Macro Headwinds
Bitcoin's performance was further compounded by a thinning buy side. CryptoQuant noted a significant slowdown in US investor appetite across spot markets, ETFs, and futures post-September rally. Key indicators included:
- ETF inflows plummeting to below 1,000 BTC/day, far below the typical 2,500 BTC/day for major rallies.
- Narrowing spot exchange premiums.
- Retreating futures basis.
These signals confirmed the marginal US buyer stepped back precisely as long-term holders increased selling pressure.
The macroeconomic backdrop also played a role, with global trade frictions, Middle East flare-ups, and the Federal Reserve's restrictive policy maintaining tight dollar liquidity. Kronos characterized the pullback as a "liquidity strain, not a trend break," noting Bitcoin still acted as a relative flight-to-safety asset despite leveraged longs being flushed.
Looking Ahead: Recalibrating or Collapsing?
While the 2018 parallel of a red October preceding a difficult year-end is concerning, today's market shows greater resilience. The investor base is deeper, stablecoin liquidity larger, and regulated products offer a steadier bid. BRN's Timothy Misir calls it a "recalibrating, not collapsing" market, with institutional accumulation continuing if Bitcoin holds above $107,000–$110,000.
October's print shifts the burden of proof to the bulls. The year's final months will depend on whether long-term holder spending cools below $1 billion/day and if US ETF flows reaccelerate. If supply stays heavy and regulated bids light, 2025 could echo 2018's choppy finish. However, a return of robust flows and calmer geopolitics might see October as an orderly handoff from older holders to new ones, rather than the start of a deeper slide.
Source: CryptoSlate
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