Bitcoin BTC
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And U.S. stocks both experienced their best September in years, with analysts outlining several factors that could keep this risky sentiment going.
“As the third quarter came to a close, both stocks and Bitcoin performed better than expected and withstood the typical decline in September,” QCP Capital analysts said.
The S&P 500 rose about 1.5% in September and 5.1% in the third quarter, its best performance for the year since 1997. Meanwhile, Bitcoin is up more than 7% this month, hitting one of its record highs in September. Performance on record, according to Coingecko data. Historically, in September, the average loss for the largest digital assets by market capitalization was around 6%.
Positive results in September have historically led Bitcoin to close higher in October, November, and December. According to Coinglass data, contrary to the typical downward trend in September, there have only been two Octobers since 2013 when Bitcoin ended with negative monthly returns – in 2014 and 2018.
Looking at Bitcoin’s monthly returns over the years, there have only been two instances where the asset ended an October with negative monthly returns. Image: Coin Glass.
Possibility of risk-on sentiment in October
QCP Capital maintains a positive medium-term outlook for Bitcoin ahead of October, saying a break above $70,000 could spark further upward momentum.
Several factors are expected to keep investor sentiment on risk in the coming weeks. Analysts noted that China’s benchmark stock index recorded its biggest one-day gain since 2008 after the country introduced a range of stimulus measures. Additionally, a recent Goldman Sachs report found that hedge funds are buying U.S. technology and media stocks at the fastest pace in four months, helped by the Federal Reserve’s recent monetary policy shift.
“China’s China Securities Index (CSI) 300 index rose 9% on Monday after introducing the largest real estate support package in years, with Goldman Sachs’ prime brokerage desk placing three times more bets on tech stocks rising than falling. “It demonstrates hedge fund positioning,” added the QCP Capital analyst.
But QCP Capital analysts tempered their bullish outlook for October, noting that the stock’s recent rally could face challenges once quarterly earnings begin in mid-October as traders reassess speculative valuations. Nonetheless, we expect Bitcoin to benefit from a stock retracement due to its nature as a risky asset amid global monetary easing, he added.
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