Bitcoin traders are watching October with fresh interest after onchain indicators began lining up with a pattern that has historically supported stronger month-end performance. New analysis from CryptoQuant suggests the market is moving into a period of “cautious optimism,” with several metrics pointing to a potential local bottom already forming.
The broader backdrop remains mixed. The start of the month coincided with headwinds tied to macro and geopolitics—such as elevated US bond yields at 24-year highs, higher oil prices, and cooling capital inflows to exchange-traded products. But according to CryptoQuant contributor XWIN Research Japan, those conditions have started to ease as October progresses, improving the odds that risk assets—including Bitcoin—can stabilize and rebuild momentum.
Key takeaways
- CryptoQuant says signals of a “potential bottom” are emerging as onchain indicators shift toward less selling pressure.
- Bitcoin exchange reserves fell about 1.7% from Sept. 20 (2.726 million BTC) to 2.68 million BTC as of Tuesday.
- Whale holdings remain above 3 million BTC, and large holders have not meaningfully increased exposure reduction despite BTC/USD sliding from $87,000 on Oct. 2 to around $80,000 on Oct. 8.
- “Apparent demand” remains near-neutral after being negative for much of 2026, suggesting demand is improving—but sustained ETF inflows would be key for confirmation.
From macro pressure to shifting onchain conditions
CryptoQuant’s latest read centers on how market conditions have changed since early October. XWIN Research Japan linked the improvement to two developments that matter for liquidity and investor positioning: cooling expectations of additional Federal Reserve rate hikes into 2027, and reduced political uncertainty ahead of US midterm elections.
For Bitcoin, this combination can be important because it influences whether broader capital rotation into—or away from—risk assets accelerates. Less uncertainty can encourage investors to reassess portfolio allocations, while easier monetary expectations can support inflows into liquid assets.
In the middle of the month’s earlier volatility, the onchain picture has increasingly suggested sellers are not pressing as hard as they were. CryptoQuant frames the overall state as improving, though not yet fully “confirmed,” emphasizing the difference between potential stabilization and a sustained reversal.
Exchange reserves: less BTC parked for trading
One of the most closely watched onchain indicators in the analysis is Bitcoin exchange reserves. CryptoQuant data cited by XWIN Research Japan shows reserves have decreased even as price fluctuated.
Specifically, exchange-held BTC fell from 2.726 million as of Sept. 20 to about 2.68 million BTC as of Tuesday. That decline—around 1.7%—suggests coins are not being broadly accumulated by exchanges for immediate selling pressure.
While the analysis notes a modest uptick over the past week, the overall direction since late September has been down. For traders, that matters because a decline in reserves is often interpreted as reduced friction for upward price movement: fewer coins sitting on trading venues can mean less immediate supply responding to rallies or buy orders.
Whale behavior: holdings remain elevated
Beyond exchange reserves, CryptoQuant also points to whale positioning. According to the report, large-volume investors still collectively hold more than 3 million BTC.
XWIN Research Japan argues that the “urge to reduce exposure” has largely persisted even through a drawdown. In the period highlighted, BTC/USD moved from roughly $87,000 on Oct. 2 to near $80,000 on Oct. 8, yet whale holdings remain above the 3 million BTC threshold.
This is an important asymmetry: while price softened during that window, the cohort responsible for a large portion of supply did not appear to dramatically increase distribution. That does not guarantee a rally, but it can reduce the probability of a rapid wave of large-holder selling that overwhelms demand.
Demand signals improve toward neutral
CryptoQuant’s outlook also draws support from demand-related metrics. The key measure referenced is “apparent demand,” which compares newly mined BTC with changes in dormant supply.
In 2026, the metric had been negative for most of the year, with a brief stretch of positive 30-day readings in the second half of August. After that, demand returned to negative territory, but the analysis says the indicator has recovered to near-neutral levels as of this week.
The implication is that the market may be transitioning from a phase where coins were more likely to remain inactive than to re-enter circulation, toward a period where supply sinks (dormant balances) and reactivation dynamics begin to stabilize demand.
XWIN Research Japan cautioned that improvement in onchain demand conditions is not the same as full confirmation. In the report, “confirmation requires sustained ETF inflows, stronger US spot buying and continued demand recovery.” That framing matters for investors because it ties the onchain improvements to concrete market catalysts—especially the role of exchange-traded products in providing consistent buy-side pressure.
Why “Uptober” may matter—but not in a straight line
The analysis is part of a broader narrative that Bitcoin often performs better in October, a theme sometimes summarized as “Uptober.” But even as CryptoQuant sees bottom-forming signals, it is not forecasting uninterrupted gains.
As one quote in the analysis puts it, “Uptober need not mean uninterrupted gains: a correction can build the foundation for the next advance.” That distinction is consistent with how traders typically interpret bottoms: stabilization often begins with volatility and digestion before any sustained upside trend.
Additional market commentary referenced in the report also reflects optimism from the wider ecosystem. Crypto asset manager Bitwise said Q3 onchain data pointed to “crypto spring” after historically significant performance, while CryptoQuant CEO Ki Young Ju said he believes a new crypto bull market started in late August, adding that the bear market is “over.”
For now, readers should watch whether CryptoQuant’s near-neutral demand recovery is followed by sustained ETF inflows and stronger US spot buying, as the analysis suggests these are necessary for confirmation. The remaining question is whether the apparent bottom signals hold under renewed macro pressure—or whether exchange reserves and whale behavior will start to shift again if volatility returns.
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