In brief
- Litecoin surged 10% to $118, while Stellar gained 9% to $0.40.
- Short liquidations topped $480 million in 24 hours, as sentiment flips sentiment from fear to greed.
- Traders are rotating into older coins with Bitcoin rising more than 8% since September 28.
The “Uptober” effect is in full swing.
Kicking off what has historically been Bitcoin’s strongest month, the original crypto has sparked a broad market rally, with capital rotating into older altcoins.
The forceful move has caught many traders off guard, triggering a massive wave of short liquidations and flipping overall market sentiment from fear to greed in a matter of days.
Litecoin has taken the lead among the top cryptocurrencies, surging 10% over the last 24 hours to trade at $118.
Litecoin’s outsized gains come amid hopes of a spot ETF approval, with the Canary Litecoin ETF facing its final Securities and Exchange Commission decision deadline on October 2.
While a U.S. government shutdown continues to weigh on investors’ minds, particularly as delays at the regulator have been put on hold, some are optimistic the issue will be resolved swiftly.
Stellar has followed closely with a 9% gain, reaching $0.40.
“Macroeconomic factors such as the U.S. government shutdown concerns and a drop in private sector employment are pushing investors toward safe-haven assets like Bitcoin and Gold.” Balaji Srihari, Vice President at CoinSwitch, told Decrypt.
As a result, capital is rotating into “dino coins,” Srihari said, referring to the 2017-launched Layer 1 tokens.
That surge has led to short liquidations exceeding $480 million in a 24-hour period, according to CoinGlass data. Compared to just $110 million in long liquidations, the disproportionate culling of bears hints at the magnitude of outsized buying pressure.
As a result, the Crypto Fear and Greed Index has shot up from fear to greed in less than a week, edging 15 points by some measures.
The seasonal uplift is what investors have dubbed “Uptober,” a trend in which Bitcoin and the broader market have historically triggered an uptrend after a typically bearish September.
“‘Uptober’ refers to October’s historical trend as Bitcoin’s strongest month,” explained Srihari. “Seasonality typically favors quarter four, and unlike the usual September weakness, this year Bitcoin ended September in the green, setting a higher base for October gains.”
The world’s largest crypto is up more than 3.5% over the last 24 hours and a further 8% since September 28 after rallying from $109,000 to $118,600 in quick succession.
If Bitcoin continues on this path, “we could see it hitting $140,000 soon,” he said, which could catalyze capital rotation into altcoins, sustaining the market breadth and serving as a tailwind to the ongoing rally.
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