Bitcoin and Ethereum experienced gains as markets rebounded from a previous day's slump, though the overall cryptocurrency market remains under pressure. Despite a recent uptick, Bitcoin is on track for its first "Red October" in seven years.
Following a week characterized by predominantly downward pressure, cryptocurrency markets are showing signs of recovery. Bitcoin has moved back above $109,000, and Ethereum has reclaimed the $3,800 level. Major altcoins have also posted modest gains. However, this slight recovery is occurring against a backdrop of a worsening macroeconomic outlook.
On Friday, October 31, Bitcoin (BTC) was trading up 1.7% at $109,225, recovering from the previous day's decline. Ethereum (ETH) saw a similar gain, trading at $3,826, an increase of 1.55%. Most other altcoins also registered gains.
Market Sentiment Dips as 'Uptober' Disappoints
The preceding day, Bitcoin had fallen to a weekly low of $106,000, occurring despite the Federal Reserve's decision to implement a 25 basis point interest rate cut. While lower interest rates are generally considered beneficial for the crypto market, this move was largely anticipated by traders.
Concurrently, Federal Reserve Chair Jerome Powell signaled a more cautious perspective on inflation, suggesting that the October rate cut might be the final one for the year. This shift in sentiment was accompanied by significant outflows from cryptocurrency Exchange Traded Funds (ETFs). By Friday, weekly Bitcoin and Ethereum ETFs had experienced outflows totaling $600 million, indicating a reduced tolerance for risk within the crypto markets.
This development coincided with an already low market sentiment surrounding cryptocurrencies throughout the week. The term "Uptober," which historically refers to positive rallies in October, failed to materialize this year. Bitcoin experienced a 15% decline from its October 6 all-time high, resulting in a monthly decrease of 6.5%.