In crypto markets, October is sometimes referred to as “Until” and for good reason. For example, last October was a particularly good month in which popular cryptos reached their all-time highs and the overall crypto market reached a market cap of $3 trillion. So what can we expect this year?
The good news is that despite all the recent hype about interest rate hikes by the Federal Reserve and weakening stock markets, there are some cryptos that could be poised for a big breakout in October. The best cryptocurrencies to watch in October include Bitcoin (BTC -0.97%), Solana (SOL -2.57%) and XRP (XRP 0.68%). The performance of each of these is key to understanding the current state of the crypto market. If all three cryptos post good gains in October, we could be headed for a very exciting 2023.
Bitcoin is of course the market’s linchpin. While some altcoins are beginning to separate from Bitcoin in terms of performance, it is almost inconceivable that we will see a major bull market rally without the participation of Bitcoin.
For the past five months, Bitcoin has been locked in a relatively narrow trading range of $18,000 to $25,000. Bitcoin is currently testing the $20,000 support level, and what happens in October will be critical.
We are still in an inflationary, rising economic environment, and major institutional investors are looking to Bitcoin to show signs of strength with each new Fed rate hike. I’m not looking for big price increases for Bitcoin this month, but I’m looking for signs of momentum and a breakout of a very tight trading range.
Last month, crypto investors focused on Ethereum, which achieved one of the most eagerly anticipated technological feats in crypto history: The Merge. Unfortunately, it was a classic case of “buy the rumor, sell the news.” Over the past 30 days, the price of Ethereum has fallen approximately 16%. For that matter, almost every other major Layer 1 blockchain — including Avalanche and Cardano — is down double digits for the month.
But the one crypto that has held up surprisingly well is Solana, widely regarded as the top Layer 1 blockchain behind Ethereum. Solana is up about 5% over the past 30 days, suggesting that investors may be looking for another crypto to take over from Ethereum to lead the market higher. New data suggests that Solana is quickly gaining ground on Ethereum in the non-fungible token market.
Additionally, Solana has been on fire lately with all of its new innovations, including the announcement of the world’s first cryptophone over the summer. The official launch of this crypto phone is planned for January 2023, so keep an eye out for what Solana may announce in October as part of its mobile crypto strategy.
Finally, we have XRP, which was actually one of the top crypto performers of September, thanks mainly to positive news about its pending litigation with the Securities and Exchange Commission. The market currently thinks that XRP will get positive news about a possible settlement with the SEC by the end of the year, and this has led to XRP skyrocketing in value. Over the past 30 days, XRP, a payment and remittance system, has risen a staggering 45% to around $0.48. Is XRP overbought because of all the speculative froth around the legal news? We’ll find out in October.
October crypto indicators
Given the fact that people keep talking about a “crypto winter”, it may be difficult to shift the narrative on crypto if we don’t see some positive signs of a market recovery before the weather turns much colder. This is why I am mainly focused on how Bitcoin and Solana perform in October.
How Bitcoin does will tell me a lot about how crypto will do during a tough macroeconomic situation. Solana’s performance could hold the key to which blockchain ecosystem will lead the way in 2023. XRP will give me insight into how speculative altcoins may fare for the rest of the year. Is there enough strength in the crypto market for a long, sustained rally? Let’s just hope that crypto isn’t too spooky for investors this October.
Dominic Basulto has positions in Bitcoin, Cardano and Ethereum. The Motley Fool has positions in and recommends Avalanche, Bitcoin, Ethereum, and Solana. The Motley Fool has a disclosure policy.