BTC briefly fell below 60K, will "depreciation trading" usher in Uptober for Bitcoin?

The ongoing geopolitical tensions in the Middle East led to a slight downturn in major U.S. stock indexes the day before the release of the non-farm payroll report. Bitcoin dipped below 60K last night, while Ether returned to around 2,300. JPMorgan believes that the escalating geopolitical tensions will drive "devaluation trades" centered around gold and Bitcoin, posing the question if the crypto market might see an "Uptober" amid these circumstances?

Market Focus on U.S. Jobs Report

On October 3rd, the U.S. initial jobless claims for the previous week were announced at 225,000, slightly higher than the expected 222,000. However, the havoc caused by Hurricane Helen in the southeastern United States, along with strikes at Boeing and ports, may distort the short-term labor market conditions.

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The September employment report to be released on Friday is a key economic indicator that could affect Federal Reserve policies. Economists surveyed by Reuters expect an increase of 140,000 jobs, with the unemployment rate expected to remain steady at 4.2%.

According to CME FedWatch, traders estimate the likelihood of a 50-basis-point rate cut next month has decreased to 32.8%, down from 49% a week ago. The probability of only a 25-basis-point cut has increased to 67.2%.

Geopolitical Tensions Bring "Debasement Trade"

JPMorgan analysts stated that escalating geopolitical tensions and the upcoming presidential election in November are driving investors to consider gold and bitcoin as safe-haven assets, referred to as "debasement trade."

This "debasement trade" is driven by various factors, including increased geopolitical uncertainties since 2022, ongoing inflation concerns, massive government deficits in major economies, and weakening confidence in fiat currencies, especially in some emerging markets.

However, while gold prices have risen due to declining U.S. Treasury yields and increased geopolitical risks, a similar situation has not yet emerged for bitcoin.

When Will "Uptober" Arrive?

QCP Capital analysts believe that the current downturn is temporary. They emphasize the close correlation between the performance of cryptocurrencies and the U.S. stock market, expecting the cryptocurrency market to follow suit as the stock market recovers.

Bitcoin fell below 60K last night, reaching $59,828. After breaking below the neckline, can bitcoin follow the "cup and handle pattern" seen in the U.S. stock market? The anticipated "Uptober" rally remains to be proven over time.

Note: "Cup and Handle Pattern": After completing a rounded bottom, there is a period of consolidation to form a handle shape, followed by a breakout above the previous high.