Rektember, Uptober and a look at the cyclical nature of Bitcoin
Of CNBCTV18.com IST (published)
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This crypto pattern has become more and more evident in recent years, especially in September and October. So much so that these two months have since been renamed ‘Rektember’ and ‘Uptober’ in the cryptosphere. Follow along as we explain the logic behind these designations and why they offer some hope in the midst of the bitter crypto winter we find ourselves in.
Bitcoin and other cryptocurrencies are said to be cyclical in nature. This means that a price rally is usually followed by a sell-off, which is then followed by another rally, and the process repeats itself over and over again.
It is a pattern that has become more and more evident in recent years, especially in September and October. So much so that these two months have since been renamed ‘Rektember’ and ‘Uptober’ in the cryptosphere. Follow along as we explain the logic behind these designations and why they offer some hope in the midst of the bitter crypto winter we find ourselves in.
Rectember
September is generally a bad month for the crypto industry, especially Bitcoin. Over the past nine years, Bitcoin has had seven Septembers in the red, with an average decline of 6 percent a month. This has given September the infamous title of Rektember.
Also this year, crypto prices stayed true to the September trend, and Bitcoin recorded a price drop of 3.3 percent between the start and end of the month. ETH also fell from $1,557 on September 1 to $1,348 on September 30, representing a 15 percent drop for the month.
Rekt is crypto slang for wreck. It refers to someone who has experienced a large financial loss due to a bad investment or trade. It can also refer to an asset that has lost significant value over time. However, entitlement is not the same as a fully realized loss. This is because rekt investments can still bounce back over time, bringing us to Uptober.
Forward
October is the opposite of September in terms of market performance. Bitcoin has been in the green seven times in the past 9 Octobers, with the only red Octobers in 2018 and 2019.
Last year, the global market capitalization of the crypto industry increased from $1.9 billion on October 1 to $2.6 billion on October 31, representing a 36 percent increase for the month. Another big Uptober was in 2013 when BTC increased almost 60 percent for the month. All these signs point to a potential price rise and a possible reversal of the bear market we are currently in.
Uptober has not lived up to expectations so far. While previous years have seen massive price increases, the current Uptober has started with price drops. Bitcoin has lost more than 2.5 percent of its value since the start of the month, while ETH has fallen 4 percent over the same period. The global market capitalization of the crypto industry also fell from $947 billion at the end of September to $928 billion at the time of writing. As such, it’s not a good start to a month generally associated with soaring prices.
Conclusion
While September 2022 stayed true to the Rektember title, Uptober is still trying to find its feet. Prices have been on a downward trend since the beginning of the month, but there is still plenty of time for a potential reversal. However, one should not be overly dependent on Uptober for a price increase. Cryptocurrencies are highly volatile, and this October could prove to be a departure from the general trend, like 2018 and 2019.
