There are several key drivers for the bullish reversal. Macroeconomic uncertainty — including the ongoing U.S. government shutdown — has led investors toward alternatives like bitcoin, historically seen as a hedge against traditional financial risks. 

Geoffrey Kendrick, head of digital assets at Standard Chartered, believes that bitcoin’s role as a safe haven is being amplified by the fiscal gridlock in Washington.

This rally has also been bolstered by so-called “Uptober” seasonality — a term traders use to describe bitcoin’s typical pattern of strong October gains. 

Over the past decade, the month has produced average returns exceeding 21%, often setting the stage for outsized fourth-quarter performance.Since 2015, bitcoin has averaged a gain of nearly 58% in the fourth quarter, outperforming every other three-month period.

Institutions appear to be playing a role in this jump as well, with increased flows into exchange-traded funds and digital custody services signaling renewed appetite from both retail and professional investors. 

Where is Bitcoin headed? 

Bitcoin has traded sideways in recent months, but key liquidity indicators suggested this breakout was coming. Global M2 growth, stablecoin supply trends, and gold’s rally — which bitcoin has closely tracked with a 40-day lag — all pointed upward.

JPMorgan analysts think bitcoin is undervalued relative to gold, estimating a theoretical upside to $165,000 if the “debasement trade” — investing in assets that hedge fiat currency risk — continues. 

Market watchers, like Kendrick, are raising their targets in response to bitcoin’s rally, with some forecasts calling for prices to exceed $135,000 in the near term and possibly reach $200,000 by year’s end if current trends continue. 

At the time of writing, bitcoin is trading at $123,319.82.