Recent volatility in Bitcoin is causing bears, to celebrate "UPtober is cancelled" as the data suggests the next bullish move is setting up for an epic Q4. When we look at Bitcoin in October 2023 which saw 7.4% drop at the beginning of the month which ended 29% up

(See chart here: https://x.com/Kellykellam/status/1842203744227738055)

Yet, many people are asking whether the market is still headed for a significant bull run. But let’s take a step back and analyze the situation. What crash are we really talking about? When we zoom out and consider broader factors like global liquidity and current economic data, we begin to see a clearer picture. Recent data aligns in favor of a positive market shift, despite the apparent short-term pullbacks. When we look at Bitcoin onchain data. The picture is clear. The most asymmetrical bull case is about to unfold.

One of the key indicators I'm focusing on is the massive outflow of Bitcoin from exchanges, which we haven’t seen at this scale since November 2022. When people move their Bitcoin off exchanges, it's often because they're preparing to hold, rather than sell. This is further bolstered by the recent Bitcoin halving in April, which reduces the amount of new Bitcoin entering the market. These two factors combined suggest that there’s less Bitcoin available to trade, a good sign for future price increases. This is the opposite of the U.S. dollar, which continues to experience inflationary pressures.

Now, when it comes to recent market drops, it's essential to understand that it wasn't just caused by one event, like the sudden escalation in the Middle East. Instead, the drop resulted from a combination of factors that does include global uncertainty, but the charts also showed a massive amount of liquidity that needed to be flushed from leveraged long positions. Additionally the price pushed right up into a know resistance zone at $65-$66k level. A pull back was expected here. This cleansing of overleveraged positions has actually created a healthier market environment. By shaking out some of the weaker positions, the stage is set for a more stable and sustainable upward trend. Bitcoin's potential trend reversal back to the upside is still in play. The near term bull case only gets weaker if we break below $52k.

Looking ahead, I'm particularly interested in November's FOMC meeting and next rate cut decision which could spark the next major move in the markets. The jobs data came out today further highlighting a resilient labor market. Banks however seem to be in worse shape than in the 2008 housing crisis. The broader market is giving signs of doom and gloom and yet is continues to buck the fear and press higher. This is at the same time that global liquidity cycle is at the start of a major uptick market which will further bouy markets and eventually pump risk assets.

Historically, when global liquidity breaks out, as we’re seeing now, it has fueled significant Bitcoin bull runs. While we need to remain cautious given the geopolitical uncertainties, I believe the best opportunities are still ahead of us.

Kelly Kellam

Main Points:

1. Massive outflows of Bitcoin from exchanges signal increased holding and decreased selling.

2. BTC Price structure is showing signs of a reversal to the upside in play; so long as we hold above $52k.

3. Recent market drops were influenced by multiple factors, including global uncertainty and liquidation of overleveraged long positions.

4. The FOMC's November decision on interest rates could trigger the next big market move.

5. Global liquidity is breaking out, historically a precursor to major Bitcoin bull runs.