Bitcoin’s Bottoming Signals Suggest October Recovery Still Possible, CryptoQuant Analysis Shows

Onchain Metrics Point to Local Bitcoin Bottom

Bitcoin’s October recovery thesis remains viable according to new analysis from CryptoQuant, the blockchain analytics platform. The firm’s research, contributed by XWIN Research Japan, highlights three key onchain metrics suggesting a local price bottom may have already formed in early October. Despite Bitcoin trading near $83,345 at the time of analysis, these signals point to underlying strength beneath recent price weakness.

The first indicator centers on Bitcoin exchange reserves, which have declined meaningfully from 2.726 million BTC on September 20 to 2.68 million by Tuesday—a decrease of 1.7%. This reduction in exchange-held supply typically signals that investors are moving Bitcoin into self-custody, suggesting confidence in future price appreciation. Meanwhile, whale holdings—the combined BTC positions of large-volume investors—have remained above 3 million BTC throughout recent volatility, indicating institutional players have resisted the urge to sell despite price pressure.

Apparent demand, a metric comparing newly mined Bitcoin against changes in dormant supply, has also recovered to near-neutral levels this week after spending most of 2026 in negative territory. These three data points collectively suggest the conditions necessary for a market bottom are improving.

Macro Environment Shifting Toward Risk Assets

Beyond onchain data, the broader macroeconomic backdrop has recently shifted in ways that could accelerate a Bitcoin recovery. Earlier in October, Bitcoin faced significant headwinds including 24-year highs in US Treasury bond yields, elevated oil prices, and declining capital inflows into crypto-related exchange-traded products. These external pressures had dampened expectations for a traditionally strong October for digital assets.

However, recent developments have begun reshaping investor sentiment. Expectations for further Federal Reserve interest-rate increases into 2027 have cooled, potentially improving conditions for risk assets including Bitcoin and the broader crypto market. Additionally, the upcoming US Midterm Elections have created political uncertainty that may resolve soon, allowing investors to reassess their portfolio allocations with greater clarity. As XWIN Research Japan noted in the analysis, reduced political uncertainty after voting could enable more confident capital redeployment into crypto and other risk assets.

Path to October Rally Requires ETF Flows and Demand Confirmation

While onchain signals suggest conditions are favorable for Bitcoin’s October performance to recover, full confirmation of a bull case will depend on sustained inflows. The analysis indicates three factors must align: continued inflows into Bitcoin spot exchange-traded products, stronger US domestic buying pressure, and sustained recovery in apparent demand metrics. CryptoQuant CEO Ki Young Ju has previously announced his view that a new crypto bull market began in late August, marking the end of the bear market cycle.

Supporting this sentiment, crypto asset manager Bitwise indicated in Q3 that onchain data pointed toward a “crypto spring” following historically significant performance. Bitcoin’s recovery from recent lows would likely lift the entire digital asset class, potentially supporting alts and Layer 1 solutions across the market. If these conditions hold, October could yet deliver the strong performance historically expected from the month.

Source: CryptoQuant, via Cointelegraph. Not financial advice.