Bitcoin's October Correction: A Strategic Entry Point Amid Macro and On-Chain Optimism

Macroeconomic Headwinds and Resilient Fundamentals

The immediate trigger for the selloff was the U.S.-China trade tariff shock, which rattled global markets and amplified risk-off sentiment. However, Bitcoin's inverse relationship with the U.S. Dollar Index (DXY) suggests that a reversal in the DXY's strength could reignite bullish momentum, according to a Nasdaq outlook. Meanwhile, global M2 money supply growth remains supportive, with central banks' accommodative policies creating a fertile environment for Bitcoin's adoption as a hedge against inflation, the Nasdaq outlook adds.

Institutional demand has remained a stabilizing force. U.S. Bitcoin ETFs have absorbed record inflows, with weekly net inflows exceeding $2 billion in September 2025, according to a Bitget report. This institutional tailwind underscores a structural shift in asset allocation, as regulated portfolios increasingly integrate crypto.

On-Chain Metrics Signal Accumulation, Not Panic

On-chain data paints a picture of disciplined accumulation by long-term holders (LTHs). Exchange balances have declined to multi-year lows, with 74% of Bitcoin's supply now illiquid and 75% dormant for over six months, an XT analysis shows. This tightening supply dynamic creates a bullish backdrop, as reduced selling pressure from exchanges and wallets with long-term horizons reinforces price resilience.

Key metrics like the MVRV Z-Score remain well below historical overextension levels (above 7), indicating substantial upside potential, the Nasdaq outlook notes. The Bull Score Index, currently between 40 and 50, aligns with pre-2024 surge conditions, suggesting a market poised for a breakout, per the CoinDesk analysis. Additionally, the Pi Cycle Oscillator's upward trend—a technical indicator tracking 111-day and 350-day moving averages—was also highlighted by the Nasdaq outlook as signaling renewed bullish momentum.

Strategic Entry Points for Long-Term Investors

For investors seeking to capitalize on the correction, the $100K–$105K range represents a critical floor. A consolidation above $112,000 could trigger a retest of the $124K all-time high, while a breakout above $113,500 would validate a bullish flag pattern, the Bitget report argues. Dollar-cost averaging into the $111,900–$113,800 range is particularly attractive, as this band aligns with historical institutional buying activity noted in the Bitget report.

Historical data from 2022 to 2025 shows that buying BTC-USD at support levels (e.g., below the 20-day Bollinger lower band) and holding for 30 trading days yielded an average return of +1.47%, slightly underperforming the benchmark's +3.47% during the same period, according to a backtest. However, the win rate of 50–63% suggests no clear edge in this strategy, with shorter horizons (6–10 days) showing modest alpha but lacking statistical significance.

The Bull-Bear Market Cycle Indicator further reinforces this thesis, identifying $116,000 as a threshold for transitioning into a bull market phase, as noted in the CoinDesk analysis. A sustained move above this level could propel Bitcoin toward $150K–$200K by year-end 2025, driven by halving-cycle momentum and ETF-driven demand, the XT analysis suggests.

Conclusion: A Correction, Not a Collapse

While the immediate future remains volatile, the medium to long-term outlook for Bitcoin is robust. The interplay of tightening supply, institutional adoption, and macroeconomic tailwinds suggests this correction is a healthy reset within a broader uptrend. For long-term investors, the current price action offers a rare opportunity to enter at levels that historically precede explosive growth cycles.