Bitcoin may have formed a local low in early October, some analysts say.

Cointelegraph reported on Tuesday that on-chain analytics firm CryptoQuant assessed that Bitcoin’s traditional “Uptober rally” pattern could still be valid, citing exchange balances, whale holdings and an apparent demand indicator.

The analysis comes as market sentiment has weakened amid recent macroeconomic and geopolitical variables. U.S. Treasury yields rose to around their highest level in 24 years, oil prices climbed and inflows into exchange-traded products (ETPs) slowed. That backdrop has weakened expectations that Bitcoin will show a strong performance in October.

Still, XWIN Research Japan, a CryptoQuant analyst, said market conditions are shifting this month in a direction favorable to risk assets. He also mentioned the possibility that a bottom is forming.

The backdrop includes changes in rate expectations. XWIN Research Japan said the possibility of improved inflows has grown as expectations for additional U.S. Federal Reserve rate hikes through 2027 have weakened. Political schedules ahead of U.S. midterm elections were also cited as a variable. He said reduced political uncertainty after the vote could help investors review asset allocation again.

Among on-chain indicators, a drop in the amount of bitcoin held on exchanges stands out first. Exchange-held bitcoin fell 1.7 percent to 2.68 million BTC as of Tuesday from 2.726 million BTC on Sept. 20. While there was a slight rebound over the past week, the overall trend is closer to a decline in sell-side supply waiting on exchanges.

Whale holdings were also presented as a support factor. Bitcoin holdings by large investors are holding above 3 million BTC. There was no notable move by those investors to reduce exposure even as Bitcoin slid from $87,000 on Oct. 2 to around $80,000 on Oct. 8.

Demand indicators also showed a gradual recovery. Apparent demand is an indicator that gauges demand by comparing newly mined bitcoin with changes in long-dormant supply. The figure stayed in negative territory throughout 2026, briefly turned positive as of a 30-day basis in late August and then fell back into negative territory. This week, however, it has moved closer to neutral, narrowing the decline by a large margin.

XWIN Research Japan said the trend suggests conditions for forming a bottom are improving, but added that confirmation would require ETF inflows to continue alongside a sustained recovery in spot demand. The market appears to be placing more weight on conditional recovery potential than on a confirmed rebound.

The broader industry is also citing on-chain data again as a basis for bullish views. Bitwise mentioned a “crypto spring” this week based on third-quarter on-chain data. Ju Ki-young (주기영), CEO of CryptoQuant, also said in late August that the bear market had ended, arguing a new bull market had begun.

Ultimately, the key point of the analysis is that Bitcoin has not completely damaged supply-and-demand indicators despite negative factors. It remains to be further confirmed whether the early October pullback will stand as this month’s low, but based on current on-chain trends alone, the October bullish scenario for Bitcoin has not yet been invalidated.