KEY POINTS

  • Crypto exchange Kraken predicts a possible upsurge in Bitcoin price this October
  • September is usually the worst month for Bitcoin
  • Bitcoin has maintained its negative correlation with the greenback

With Bitcoin continuing to decouple with legacy markets, a new report from cryptocurrency exchange Kraken said the benchmark cryptocurrency is poised to gain as much as 11% this October. 

According to Kraken’s September report, Bitcoin’s October performance could eclipse that of September, which is usually Bitcoin’s worst-performing month of the year. In eight of the last nine years, Bitcoin’s average return every October is around 11%.

The report noted that an 11% increase means Bitcoin could close October with a price of $11,850 per BTC. That’s 3% from the current price level.

Another indicator of a possible increase in price is Bitcoin’s annualized volatility, which has already bottomed, Kraken said. In the last 12 times that Bitcoin’s annualized volatility bottomed between 15% and 30%, it would be followed by a highly volatile period that could lead to further upside. 

While Kraken did note that Bitcoin actually underperformed in six of the last nine months this year, it also revealed that Bitcoin has been continuously decoupling from the dollar and the stock market. 

Bitcoin has maintained its negative correlation with the U.S. Dollar Index (DXY) in the last five months despite having a brief period of positive correlation around May this year. The divergence from the dollar is attributed to the plan of the Federal Reserve to maintain 0% interest rates in the next three years.

With inflation looming, investors would naturally go to assets that are deemed “store of value,” such as Bitcoin and gold. Both the benchmark cryptocurrency and the metal have shown positive correlation with each other since July, the report said.

Despite reports of Bitcoin showing positive correlation with the stock market, the cryptocurrency’s correlation with the S&P 500 has already sunk to an eight-month low of -0.27 before rebounding to 0.60.

Aside from technical indicators, the fundamentals are also looking good for Bitcoin, the report said. The average hashrate and the average number of active addresses have continued to increase even though the pace of growth on these two fundamental indicators appeared to still not be reflected in the current BTC price.

News outlet Cointelegraph noted that Kraken’s report appears “mildly optimistic” and was outshone by other analysts who are anticipating large institutional adoption in the near-term. Macro trader Raoul Pal said he has transferred a major portion of his personal investment portfolio into Bitcoin.

“Just from what I know from all the institutions, all of the people I speak to, there is an enormous wall of money coming into this,” he said in a video.

bitcoin-2007769_1920 Bitcoin Photo: Bitcoin