Can the Midterms Trigger a Bitcoin Rally? 3 Factors Suggest Yes

Bitcoin (CRYPTO: BTC) is showing early signs of a potential October bottom as improving on-chain demand and the approaching U.S. midterm elections fuel expectations of a recovery.

Why an October Bottom?

CryptoQuant data highlighted that as of Oct. 12, markets priced in roughly an 18% probability of a Fed rate hike in October, while Brent crude had retreated from nearly $110 to around $103.

However, crypto market conditions are improving despite persistent macroeconomic headwinds, elevated Treasury yields and slowing spot Bitcoin ETF inflows.

Three on-chain indicators suggest Bitcoin could be approaching a bottom:

• Exchange reserves: Bitcoin balances on exchanges remain relatively low despite a recent rebound, potentially limiting immediate selling pressure.
• Apparent Demand: Demand has recovered sharply from deeply negative levels, although it remains below zero.
• Whale accumulation: Large holders have increased their combined holdings to almost 3 million BTC, maintaining elevated balances through the correction.

CryptoQuant noted that "Uptober" does not necessarily mean uninterrupted gains, as a market correction could lay the groundwork for the next rally.

Bitcoin Rally Before Midterms, Correction After?