JPMorgan predicts bullish ‘Uptober’ as Bitcoin begins Q4 rally
NEW YORK (October 7) ‘Uptober’ got off to a rocky start for the cryptocurrency market, but with Bitcoin (BTC) now on the upswing and looking strong, analysts at JPMorgan say that the fourth quarter could see a meaningful rise in crypto prices.
According to a research report released by JPMorgan analysts on Monday, several critical factors, ranging from technical developments to geopolitical and structural events, could influence the cryptocurrency market in the coming months.
The analysts noted that the historical trend of cryptos performing strongly in October, which the community has dubbed ‘Uptober,’ shows that Bitcoin has yielded positive returns more than 70% of the time. If the current rally continues, this year will be no different.
“While previous performance is not a predictor of future performance, we think this popularization of 'Uptober' may influence behavior and result in a positive month for Bitcoin this October,” the analysts wrote.
They said the biggest tailwinds are the recent interest rate cut and the Fed's planned future cuts, suggesting that the broader cryptocurrency market has yet to see the anticipated positive effect of the cut that has already been implemented.
While declining interest rates typically support risk assets, they noted that the correlation between the total crypto market capitalization and the Federal Funds rate remains weak at 0.46.
“We have yet to see the ‘pop’ in cryptocurrency prices expected from lower rates since the Fed’s September 18 cut,” they said, adding that the market may be waiting for more sustained stability before making a decisive shift.
However, they noted that all predictions about future performance should be scrutinized, as the lack of historical data complicates forecasting how cryptocurrencies will respond to rate cycles.
“Crypto assets really only emerged in the early-to-mid 2010s, and rates were near zero for most of their existence,” they noted. “It’s possible that stable rates, rather than just low ones, will benefit these markets the most.”
The analysts highlighted a second catalyst: the recent approval of options trading for BlackRock's iShares Bitcoin Trust spot ETF, which the Securities and Exchange Commission (SEC) granted in mid-September. They suggested this could deepen liquidity and attract new participants to the market, but only after the new options receive final approval from the Options Clearing Corporation (OCC) and the Commodity Futures Trading Commission (CFTC).
“With options, investors now have a more dynamic way to engage with the ETF and drive liquidity in the underlying asset,” they said, adding that this development could initiate a positive feedback loop and enhance the market structure, making digital assets more accessible to institutional investors.
Another notable development that could boost sentiment in the crypto market is the upcoming Ethereum (ETH) upgrade, known as ‘Pectra.’ This upgrade will implement over 30 Ethereum Improvement Proposals (EIPs) to improve network efficiency, validator operations, and account abstraction.
“While Pectra is expected to be transformational for Ethereum’s functionality, we view this upgrade as more structural than an immediate price catalyst,” the analysts said. In the long term, they see Pectra boosting Ethereum’s operational efficiency and adoption but said it's unlikely to initiate a short-term surge in Ether’s price.
For now, the analysts said the crypto market is in a holding pattern as investors await a clearer macroeconomic or structural catalyst to drive sustained growth.
“We continue to see the crypto ecosystem being incrementally more sensitive to macro factors, so we await the next major catalyst for development and enhanced retail engagement to provide secular growth for the ecosystem,” they concluded.
Analysts at QCP Capital also addressed the shaky start to Uptober, saying that it “seems to be back on track,” noting that “BTC is at similar levels to where it started last Monday.”
“The Uptober narrative coupled with strong [non-farm payroll] numbers has helped BTC find strong support around 60k,” they said. “The upcoming HBO Bitcoin documentary has also brought more mainstream attention to crypto as memecoins themed after Len Sasssaman are also starting to gain traction.”
“Despite the rough start last week, options flows are still pointing to a bullish Q4 as we continue to see buyers of Dec 75k/95k CSpds,” they added. “With additional rate cuts lined up and BTC’s strong correlation to equities, we still remain optimistic of a strong October.”
“That being said, all eyes are on US CPI this Thursday,” they cautioned. “With the recent strong US wage and job numbers, the market will be paying close attention to this print for any signs of an uptick in inflation. Fed rate cut expectations have shifted from 50 bps to 25 bps in just a week, and this week’s data may determine if further cuts get priced out.”
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