Positioning before a key macro week is rarely random. Interestingly, that’s how this situation is playing out again this time.
High caps are breaking key support levels, suggesting that investors are either preparing to buy the dip or anticipating a deeper correction. Current positioning signals indicate a growing tilt toward the latter.
As one X post highlights, Bitcoin could be in for a run towards $60k, with some calling it an “inevitable setup.” Historically, Q4 has been bullish for Bitcoin and the broader crypto market, with average returns exceeding 71%.
More than half of these gains have historically come in October and November combined, fueling the seasonal “Uptober” narrative.
However, the current derivatives situation is challenging this bullish scenario.
According to Ethereum’s Whale and Retail Delta, the metric is showing negative 30-day and 180-day Open Interest Deltas, plus a negative Whale vs. Retail Delta. This means that derivatives positioning is skewed towards the downside, suggesting that whales are unwinding their longs and accumulating shorts.
Meanwhile, on Bitfinex, Ethereum longs have hit their highest level in four years.
Meanwhile, Ethereum longs on Bitfinex reached their highest level in four years, revealing a pocket of bullish conviction.
Bitcoin [BTC] also showed three major liquidity concentrations around $89K, $79K, and $74K. Those clusters highlighted potential volatility zones, rather than confirming traders expected an upside move.
The question, then, is whether bullish bets can withstand another round of macro uncertainty.
Bitcoin torn between macro fears and Uptober hopes
Bitcoin faced several potential catalysts during the week beginning the 12th of October.
On Monday, U.S. markets re-open after the reported lifting of sanctions on Russian diesel. Jobs and housing data come out on Tuesday, providing fresh insight on the U.S. economy.
On Wednesday, CPI and Core CPI inflation readings will take center stage, followed by PPI and Core PPI on Thursday. Finally, on Friday, Kevin Warsh is scheduled to speak.
Meanwhile, the spot market flows are less mixed. U.S. spot Bitcoin ETFs had a net inflow of $21.13 million, with nearly all of the capital flowing into BlackRock’s IBIT.
However, the broader trend remains weak, with the funds recording a $681 million outflow this week, the biggest weekly outflow in more than three months. This implies that despite a brief return of buying interest, institutional demand for Bitcoin is under pressure.
Do Bitcoin’s bearish bets put $60K in play?
Against this background, the increasing short-side positioning in derivatives appears rather deliberate.
The spot ETF outflows point to a weak appetite while the derivatives traders ramp up their bets, hence creating a textbook “spot-vs-derivatives” divergence in the flows. With the important macro week ahead, this divergence is clearly putting Bitcoin’s “Uptober” rally in danger and its $60k downside target in focus.
Final Summary
- Bearish bets and ETF outflows are putting pressure on Bitcoin despite hopes for an “Uptober” rally.
- Key economic data this week could determine whether Bitcoin recovers or falls toward $60k.