Bull Market Hesitation: Bitcoin's Trend Is Intact, but the Coming Weeks Are Hard to Feel Optimistic About

The Fed's October 28 policy meeting is the headline event of the month, because it will set the tone for the price of money across all assets. Markets currently expect no change in rates. According to the CME FedWatch Tool, interest-rate futures[2] traders put the odds of the Fed standing pat at about 87%, and see the next move as more likely to come in December. Of the 14 large brokerages surveyed on October 1, 13 expected the Fed to hold rates steady.

In normal times, a pause in rate hikes would be welcomed by holders of risk assets. When safe government bonds no longer offer ever-higher returns, speculative assets like Bitcoin become relatively more attractive. But these are not normal times. In the year through September, consumer prices[3] rose 3.7%, and by 0.6% in September alone. Traders are already looking past the Fed's pause this time to the moves that may follow. Futures markets show the probability of a December hike at close to 90%. The bond market confirms it. The yield on the 10-year Treasury[4] has hovered around 5.2% this month, having broken above 5% in September for the first time since 2007. Producer prices[5] are equally unsettling: even excluding energy, they are up 5% over the past year.

The September inflation data released on October 14 showed just how sensitive investors have become. The reading came in above expectations, and markets reacted immediately. US stock futures fell, and Oracle, which has invested heavily in AI data centers, dropped more than 7%. Bitcoin fell from about $83,800 to below $82,000 within hours.

Such a negative market reaction leaves Bitcoin investors with a thorny question. Long-term on-chain metrics[6] that track how coins move between wallets show Bitcoin is still in bull-market territory. Short-term indicators, however, are flashing yellow. Should holders stand pat, or take profits and wait to buy back at lower levels?

1. Clouds Gathering

The case for caution comes from both the charts and the broader external environment. Bitcoin's technical indicators are cooling, and its supply logic is weakening. The forces that drove the last rally are now starting to form headwinds.

1. Signals Turn Yellow

Start with the trend model[7] used in the original analysis. The model enters when a trend is confirmed, sells when the trend breaks, and parks the proceeds in stablecoins[8] until the next signal appears. The model turned bullish on July 20, when Bitcoin was at $64,807. Bitcoin then rose about 26% to $81,595 before stalling. Meanwhile, the model's trend line creeps up slightly each day and now sits at $79,654, less than 3% below the current price. A modest pullback would be enough to trigger a sell signal. That also raises a bigger question: should investors follow such signals at all?

Momentum indicators point the same way. The weekly stochastic indicator[9] measures where the price sits within its recent range. The indicator fell below 20% in August, a reading that means the market was oversold[10], and its recovery came before this rally. It now reads about 90%, a level typically associated with an overbought market. Past experience shows that when the indicator drops back below this level while crossing down through its slow moving average, it often marks a weakening trend. A weekly close below $82,000 would confirm the signal. Given the current inflation backdrop, that is quite likely to happen.

2. The Halving Effect Fades

Bitcoin's own supply logic is also less reassuring than it once was. Past cycles were driven mainly by the "halving"[11]. The halving is a scheduled 50% cut in the reward miners receive for packaging new blocks, occurring roughly every four years and halving the inflow of new coins. Many holders still position themselves around this rhythm, expecting the familiar four-year cycle[12] to deliver the next bull market on schedule. That expectation may not hold up. Of the eventual 21 million bitcoin, about 20.1 million have already been mined, and the annual issuance rate[13] has fallen from 12.9% of the existing supply to just 0.82%. Halving an already tiny trickle has very limited impact. Investors who rely on the calendar may hold all the way through a decline while waiting in vain for a supply shock that has lost its potency. Prices now depend more on the macro environment and on where investors' money is flowing, and those investors often make decisions with little connection to crypto itself.

3. Miners Under Pressure

One of those flows may come from the miners themselves. Miner wallets still hold close to 1.8 million bitcoin. Many miners have redirected their cheap long-term power contracts to lease data-center computing power to AI companies. That looked shrewd while AI stocks were soaring; now it does not. Rising bond yields have pushed up the cost of borrowing needed for expansion, while falling share prices have eroded the value of their collateral. Selling bitcoin from reserves may be the easiest way to finance expansion, and the market will have to absorb that extra supply.

4. The AI Cycle Turns

The broader AI trade is also wobbling. The chip industry has always alternated between boom and bust, from the mid-1990s Windows PC boom to the 2016-2018 cloud-driven memory chip boom. The AI-driven upcycle that began in 2025 lifted Samsung Electronics and SK Hynix and powered the Korean stock market. Since its June high, the Korean index has fallen 41%. The slide began just as Samsung completed a $11 billion share buyback[14] and SK Hynix completed 89% of a $30 billion buyback plan. Competition from China, revenue adjustments at OpenAI, and a delay in Anthropic's listing plans all contributed. Investors in Hong Kong-listed Chinese rival Z.AI have watched its shares lag well behind the main US semiconductor index[15].

5. From the Pump to the Ballot Box

Politics closes the loop. The US midterm elections[16] will be held on November 3, and voters' top concern is the cost of living. Gasoline and diesel prices remain painfully high because of supply shortages caused by the Iran war. Polls suggest Democrats are on track for a sweeping victory, and many Democrats oppose building more AI data centers. Higher oil prices push inflation up, inflation pushes voters toward Democrats, and a Democratic win could slow the data-center expansion that miners have bet their future on.

The Bullish Factors

But that does not mean the bull market is over. Treasury yields may have peaked. After the inflation data, the 10-year yield briefly broke above 5.3%, then pulled back to close at 5.19% that day. It has since fallen further to just below 5.1%, the lowest since late September, despite the hotter-than-expected inflation reading. Yields falling rather than rising on bearish inflation news suggests the selling may be over. The recent rise in yields looks more like a temporary repricing than a lasting shift.

Bitcoin has also shown surprising resilience. When the Fed hiked in September, Bitcoin was trading at about $75,000 to $76,000; it has since risen above $80,000, even as Korea's chip-heavy stock market plunged and AI favorites like Oracle tumbled over the same period. Politics could help too. Bank of America data show that since World War II, the S&P 500 has risen in the six and twelve months after every midterm election, by an average of about 13% and 14% respectively. Since 1970, the index has gained an average of 6.5% in the three months after an election, versus just 2.5% in the three months before. A rising stock market does not guarantee Bitcoin will follow, but as the market's reaction to the inflation data showed, the two have moved in tandem lately. Meanwhile, as long as Bitcoin holds the roughly $75,500 area, the long-term on-chain picture remains bullish.

Hold or Exit

All of this leads back to investing's oldest debate: hold firm, or time[17] your entries and exits? Buy-and-hold[18] has a lot going for it. It is cheap, simple, and requires no forecasting. Most importantly, it ensures investors are in the market on the few trading days that tend to account for most of an asset's gains. Bitcoin has a history of sudden, violent rallies that rewarded investors who held on; anyone who bought 11 years ago and never sold is sitting on large gains today. For those with a long horizon and a strong stomach, standing pat remains a sound strategy.

But the past five years look less flattering. Over that period, buy-and-hold bitcoin returned about 8% annualized. A trend model that exits when price falls below the trend line and re-enters when it recovers returned about 25% annualized. The gap comes more from avoiding losses than from capturing gains. Bitcoin has repeatedly halved or fallen even further in bear markets[19], and a portfolio down 50% needs to double just to break even. Avoiding the worst declines matters more than catching every rally. Nor does money waiting on the sidelines have to sit idle. Depending on the product and its terms, stablecoins can earn yield while holders wait for the next signal. Of course, past returns do not guarantee future performance.

Exiting and re-entering has its costs too. Trend signals are sometimes wrong. If the market rebounds quickly after a sell signal, investors may have to buy back at a higher price than they sold; in choppy markets, such false signals[20] can come in succession. Every trade incurs transaction costs and, in some jurisdictions, tax liabilities. The approach also demands something many investors find difficult: selling while the long-term outlook is still good, and buying back when sentiment may be worse than before. Rule-based models are useful precisely because they make those decisions for the investor.

Neither approach always wins. Buy-and-hold works best in bull markets that run smoothly without severe interruptions; trend following works best when sharp declines interrupt the advance. The current environment is closer to the latter: the structural uptrend is intact, but inflation, climbing yields, and pressured miners could trigger a sharp drop along the way.

Conclusion: Sell High, Buy Low

The evidence suggests what is needed now is discipline, not despair. If price breaks below the trend line, the model will signal taking profits on the summer rally and holding stablecoins until the next buy signal. If the bull market resumes, that signal will come in due course, and investors can re-enter with their capital intact. Doing so may feel like losing faith in the bull market, but it is better understood as a way of staying in it. After all, you can only buy low if you have sold high first.

BIT offers bitcoin spot and derivatives trading as well as fixed-income products, helping investors execute rule-based investment plans in both directions. Subject to applicable terms.

Glossary

1. FOMC meeting: A meeting of the Federal Reserve's Federal Open Market Committee, which votes on interest rates. The committee meets eight times a year, and its decisions affect borrowing costs, the dollar, and asset prices worldwide.

2. Interest-rate futures: Contracts that let traders bet on where the Fed's benchmark rate will be on a future date. The CME FedWatch Tool converts their prices into market-implied probabilities for each possible decision at each meeting.

3. Consumer Price Index (CPI): A monthly measure of price changes for a basket of goods and services purchased by US households. The headline figure includes food and energy; the "core" figure excludes both because they are volatile.

4. 10-year Treasury yield: The annualized return an investor gets from buying a US government bond maturing in ten years and holding it to maturity. It is seen as the benchmark "risk-free rate" against which other investments are measured.

5. Producer Price Index (PPI): A monthly measure of the prices businesses receive for the goods and services they sell. Because businesses tend to pass cost increases on to customers, it can provide an early warning of price increases that will later show up in CPI.

6. On-chain metrics: Metrics built from data recorded on the blockchain itself, such as how long coins have been held, holders' cost basis, and how coins move between wallets. These metrics are used to gauge where Bitcoin sits in its long-term cycle.

7. Trend model: A rule-based strategy that follows price direction. It holds the asset while price stays above a trend line (a reference level calculated from past prices) and sells when price breaks below it.

8. Stablecoin: A cryptocurrency designed to maintain a fixed value (almost always $1), usually backed by cash and short-term government debt. USDT and USDC are the largest.

9. Stochastic indicator: A momentum indicator that compares the latest closing price with the high and low over a set period, on a scale of 0 to 100. A higher reading means the price is closer to the top of its recent range.

10. Overbought and oversold: Describes a market that has risen (overbought) or fallen (oversold) too far, too fast, making a pause or reversal more likely. On the stochastic indicator, readings above 80 to 90 are typically called overbought, and below 20 oversold.

11. Halving: A scheduled 50% cut in the reward bitcoin miners receive for each new block, occurring every 210,000 blocks, or roughly every four years. The halving halves the number of new coins entering the market.

12. Four-year cycle: The pattern in which bitcoin's price has roughly peaked and troughed about every four years, broadly in step with the halving schedule.

13. Issuance rate: The number of new coins created in a year as a percentage of the existing supply, effectively bitcoin's own inflation rate.

14. Share buyback: A company using cash to buy back its own shares from the market. This reduces the number of shares outstanding and tends to support the share price while the program is being executed.

15. Semiconductor index (SOX): The Philadelphia Semiconductor Index, which tracks large US-listed chip companies and is the most closely watched gauge of chip-sector share prices.

16. Midterm elections: Elections held halfway through a US president's four-year term, in which all House seats and about one-third of Senate seats are up for election.

17. Market timing: Trying to buy before prices rise and sell before they fall, rather than holding through every swing.

18. Buy-and-hold: A strategy of buying an asset and holding it through ups and downs regardless of short-term market conditions.

19. Bear market: A sustained decline in prices, usually defined as a drop of 20% or more from a recent high.

20. False signal: An indicator signal that is quickly reversed, such as a sharp rebound right after a sell signal. Repeated false signals in choppy markets are sometimes called "whipsaw."

Disclaimer

This article is adapted from research by an independent analyst and supplemented with reporting from the sources listed above. The views expressed are those of the original analysis and do not necessarily represent those of BIT. This article is for reference only and does not constitute any investment, financial, or trading advice, nor an offer or solicitation to buy or sell any asset. Model results are based on historical analysis, and past performance does not guarantee future results. Digital asset investment carries significant risk, and readers should do their own research and consider their own circumstances before making any investment decision.