Copyright The Street
October has the entire crypto community wondering whether the month is "Uptober" or "Rektober." First, Bitcoin (BTC) hit a new record high price north of $126,000 during the first week. But toward the end of the second week, President Donald Trump's anti-China remark led to a crypto market crash that witnessed more than $19 billion in positions being wiped out. Now, Halloween is upon us and crypto traders are worried if the ghosts will haunt the market tomorrow. Understanding 'Halloween strategy' "Halloween strategy" is a market timing strategy popular within the traditional markets. It is based on the belief that securities perform better from Oct. 31 (Halloween) to May 1 as compared to the rest of the year. It recommends that traders should purchase stocks on Halloween and early November, hold them through the winter, and sell them by early May. Also known as "sell in May and go away," it recommends that traders should invest in other asset classes beginning in May. Does the hypothesis hold true for the crypto market also? TheStreet Roundtable talked to two leading crypto analysts at length to find out if any correlation exists. Halloween could mark inflection, not rally Lacie Zhang, a research analyst at Bitget Wallet, said that October has already challenged the typical “Halloween Effect” pattern in the crypto market due to one of the weakest drawdowns in recent years, driven by large liquidations and macro shocks. "For traders this means the Halloween transition may be less about a smooth seasonal bounce and more about a pivot point: the large derivative expiry cluster around Oct 31 combined with the macro backdrop mean Halloween could mark an inflection rather than a rally." Zhang said the crypto market could pause, regroup, or test whether the seasonal pattern still holds. But it is prudent to expect higher volatility rather than a clear up-leg, he added. Bitcoin highly sensitive to Halloween options expiry Bitcoin's price path is highly sensitive to directional triggers due to heavy options expiry and weaker sentiment, Zhang underlined. BTC options contracts worth $14.4 billion and Ethereum (ETH) options worth $2.6 billion will expire on Halloween (Oct. 31). Scroll to Continue Recommended Articles BTC could recover if the sentiment turns bullish or macro flows return; otherwise, BTC's downside could resume, Zhang warned. ETH will follow BTC's trajectory, though the former carries lower gamma risk common to options trading. More News: Binance fires back at senator who said it was 'promoting Trump crypto' You can now buy Chinese cars without cash or credit card Wealthy trader bets millions ahead of Fed's 2PM announcement Halloween signals a potential launch-pad or trap, not a seasonal rally Historical data suggest the "Halloween Effect" in crypto is inconsistent as only six out of ten years have shown post-Halloween gains, Zhang highlighted. So traders should focus on risk management for the upcoming period. Halloween 2025 is less about expecting a seasonal rally and more about positioning for a potential launch-pad or trap, Zhang gave his final verdict. 'Scary, spooky, bone-chilling' Halloween Crypto analyst Nic Puckrin issued a more severe warning. “It’s going to be a very scary, spooky, bone-chilling Halloween for crypto traders. This month was supposed to be “Uptober”, but we got “Downtober” instead." Puckrin is the co-founder of The Coin Bureau, who earlier worked as an analyst at Goldman Sachs. Bitcoin and other cryptocurrencies are struggling following an anticlimactic FOMC meeting, where Federal Reserve Chair Jerome Powell failed to provide any assurances of a December rate cut, he highlighted. Though the end of quantitative tightening in December, as Powell announced, will inject liquidity into the market, it isn’t enough to send prices higher, warned Puckrin. The analyst expected more volatility in the crypto market over the coming weeks. "Crypto traders will have to navigate this environment carefully. Excessive leverage is dangerous in a market so precariously balanced." The crypto market has been tumbling ahead of Halloween. The total market cap fell 3% in the last 24 hours and stood at $3.64 trillion at press time. BTC was trading at $108,073.31, down 2.8% in a day. ETH was trading at $3,792.45, down 4.5%.
