According to economist Timothy Peterson, the recent drop in Bitcoin could be temporary if the history of October repeats itself. Drops greater than 20% in October are unusual — only four times in the last decade — and Bitcoin generally recovers quickly.
History of October rebounds
Reports reveal four drops in October in 2017, 2018, 2019, and 2021. The week following each decline, prices rose by 16%, 4%, and 21%, with 2021 being the only anomaly when prices fell by 3%.
After a big drop in October, Peterson predicted a 21% return in seven days based on those historical patterns. Bitcoin has generally performed well in October, according to CoinGlass and other publications.
A tariff shock caused a rapid movement in the market this week. Bitcoin quickly fell to $102,000 when President Donald Trump announced high taxes on China.
Prices then recovered slightly to $112,100. Traders noticed that the drop occurred after Bitcoin reached $126,000 earlier in the week.
Short-term gains
Bitcoin could trade around $124,000 in days if it replicated its largest rebound in October, a 21% increase in 2019.
This simple arithmetic is cited by analysts conducting various simulations. Some feel there is a possibility that the month will end above current levels. BTCUSD at $112,109. TradingView chart Others in the market disagreed. Some said that the current drop marks the bottom of the cycle, a reset during a rise.
Others warned that surprises in politics or tariff escalations could prolong selling pressure. Social analyses and sentiment indicators increased during the sell-off, while some cryptocurrencies lost more in the search for safety.
Possible rebound triggers
Some obvious triggers are being observed by traders. Diminishing trade tensions between the U.S. and China that ease headlines could calm the markets.
Signals that the U.S. Federal Reserve would accelerate interest rate cuts could boost Bitcoin and other risk assets. Panic selling often ceases before a substantial rebound, but not always.$BTC
