Uptober: What's The Hype All About?

Not so long ago, we spoke about September historically being the worst month for prices in the crypto market (it turned out better than expected). Interestingly, this follows another theory called ‘Sell in May and go away,’ where it is believed markets like stocks and crypto decline from May.

However, there is light at the end of the tunnel as we enter into October or, as crypto traders call it, ‘Uptober.’

What is ‘Uptober?’

‘UPtober’ is a theory that October is one of the best-performing months for the crypto market. While many focus on this period, it is technically November which is the top performer (but October comes second).

Analysts have noted that the second half of October usually offers the most gains rather than the whole month.

Is ‘Uptober’ real or a myth?

The data below shows that Bitcoin has ended October in the green every year since 2013 (except for 2014 and 2018). While averaging a rise of 22.90% (the second-highest of all months), it shows the highest median.

The immediate assumption is that Uptober is real, and, for the most part, it is. As with the September effect, this so-called theory boils down to seasonality in the stock market.

The relationship between stocks (especially those from the US) and cryptocurrencies has become a hot topic over the past few years. This is because investors in stocks also got themselves some crypto. When one goes up or down, the other often follows the same direction, more so in recent years.

The US stock market is essentially one of the great-great-great grandfathers of financial markets, holding much power over other traded assets.

Generally, stocks flow in this pattern:

• Share prices begin to rise from January until April
• Investors sell stocks from May until the end of summer (end of August), leading to the saying, "Sell in May and go away.'
• Aside from the expected drop in September, rallies commonly begin after this period until the end of the year.

As you can see, October comes after a ‘bad’ month as a reliever before November (and hopefully December) puts the final bullish touches on it.

The way forward

As we know, past performance is not always an accurate reflection of future performance. Crypto traders tend to feed into hype and may fall prey to FOMO (fear of missing out).

Your crypto plans this month shouldn’t be based solely on the Uptober theory—we always look at the bigger picture. Nonetheless, it will be interesting to see what this period brings and what our users say.

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