Bitcoin is on track for a monthly loss in October for the first time since 2018, ending a seven-year streak of gains that had made the month favorable for cryptocurrency traders.
The leading cryptocurrency is poised for a nearly 5% decline this month, struggling amidst broader market uncertainty and a decrease in investor risk appetite.
Adam McCarthy, a senior research analyst at Kaiko, noted that cryptocurrencies began October tracking gold and stocks near all-time highs, but as uncertainty surfaced, investors did not shift back into Bitcoin en masse.
October also witnessed the largest crypto liquidation in history following U.S. President Donald Trump's announcement of a 100% tariff on Chinese imports and potential export controls on vital software.
Bitcoin dropped to $104,782.88 during the October 10-11 period, shortly after hitting a record high above $126,000.
McCarthy remarked that the liquidation event reminded investors of the volatility within this asset class, emphasizing that even leading cryptocurrencies like Bitcoin and Ether are susceptible to significant price swings.
As October concludes, investors remain cautious amid uncertainties surrounding global monetary policy, exacerbated by the U.S. Federal Reserve's reluctance to cut interest rates amidst a government shutdown affecting economic data release.
Concerns regarding high equity market valuations have been voiced by influential figures, including JPMorgan Chase CEO Jamie Dimon, who warned of a potential significant correction in the U.S. stock market within the next six months to two years.
Jake Ostrovskis, head of trading at Wintermute, noted that participants are hesitant in light of the largest liquidation event on record and ongoing speculation about vulnerabilities in the market.
Despite the decline in October, Bitcoin has risen over 16% this year, benefiting from favorable regulatory shifts as Trump has shown support for digital assets, leading to the dismissal of lawsuits against major crypto platforms.