Crypto rejection, Tom Lee’s optimism, and what Uptober really means for altcoins

Crypto just ran into a wall. Bitcoin, Ethereum, and a long list of altcoins have been rejected at key resistance levels, leaving traders wondering if the Q4 rally is already over before it really began. At the same time, some high-profile analysts are calling for one of the strongest bull markets ever. So which is it?

This article breaks down the latest macro views from Tom Lee, what’s really behind the “Uptober” narrative, and how altcoin charts are quietly flashing some of the most important signals we’ve seen in years.

Tom Lee’s midterm “surprise” and why he’s still bullish

Tom Lee, a well-known market strategist, is once again leaning bullish on risk assets, including crypto. His thesis rests on a few key points in the broader economy:

• The jobs market has been stronger than expected.
• Inflation has been cooling faster than many feared, which makes further Federal Reserve rate hikes less likely.
• Corporate earnings growth in Q3 is tracking very strongly, with forward earnings per share outpacing stock price gains — meaning stocks are actually getting cheaper on a valuation basis, not more expensive.
• Tech and crypto strength are, in his view, early signals of easier financial conditions and lower inflation ahead.

Lee expects some potential weakness into late October and early November around the U.S. midterm elections, but he still sees a bullish finish to Q4 overall. In his words, this could be “maybe the biggest bull market we’ve ever seen.”

Why markets often rally after U.S. midterms

There’s also a strong historical pattern that supports Lee’s optimism. Since 1946, every single U.S. midterm election has been followed by positive stock market returns over the next 12 months. The average gain has been around 14.4%, with the best post-midterm year returning roughly 34%.

The logic is simple: markets hate uncertainty. Once the election is over and the political balance of power is known, investors can stop worrying about what-ifs and start pricing in reality. That reduction in uncertainty has historically been enough to fuel a strong move higher.

Bitcoin has shown a similar pattern. In the years following recent U.S. midterms, BTC returns have been very strong, with triple-digit gains in several cycles. If that pattern holds, the period into 2027 could be particularly favorable for crypto.

Macro risks: energy, inflation, and geopolitical noise

There are, of course, real risks. Diesel and oil prices remain elevated, disruptions in global energy and fertilizer markets haven’t fully worked their way through, and geopolitical tensions are never far from the headlines. Any major shock — whether an energy crisis, a serious new global health scare, or a severe escalation in conflict — could derail the bullish narrative.

However, it’s worth remembering that most of the time, the worst-case scenarios don’t play out. Markets tend to grind higher in the face of constant “end of the world” headlines, and so far, U.S. inflation data and the stock market’s resilience suggest the Fed is unlikely to slam on the brakes again in the near term.

Bitcoin’s latest rejection: painful, but still normal

Bitcoin recently printed a sharp red candle, getting rejected after grinding up into a key resistance band. On the chart, BTC remains in a broader range between roughly 82.5k (initial breakout zone) and 87.5k (overhead resistance), consolidating after its recent move higher.

Price is hovering around the 20-day exponential moving average (EMA), which is a common place for pullbacks during an uptrend. A bounce from this level would be textbook behavior. A deeper move down to the 50-day EMA would still be normal in a bull market and could even set up a better entry for trend traders.

Importantly, corrections like this help flush out excessive leverage and greed. If Bitcoin had spiked higher straight through resistance with overleveraged longs crowding in, the move would have looked more like distribution — smart money selling into retail euphoria. A slower, grinding advance is usually healthier and more sustainable.

For a deeper dive into how these kinds of rejections and liquidations play out across BTC, ETH, and altcoins, see this breakdown of Bitcoin’s latest rejection and liquidations.

Ethereum: bullish retest or warning sign?

Ethereum’s chart has been even more dramatic. After a breakout, ETH pulled back aggressively toward its previous resistance zone, which now acts as support. From a pure price-structure point of view, that’s a bullish retest: break out, come back down, confirm the level, then move higher.

But momentum indicators are flashing caution:

• The MACD is signaling bearish momentum, suggesting the short-term trend is still down.
• The RSI has slipped below 50, indicating a loss of bullish strength.

Two paths are most likely from here:

1. ETH finds support near the 20-day EMA, stabilizes, and resumes its uptrend.
2. It slices down to the 50-day EMA, where a deeper but still healthy bull-market retest could take place.

Either way, the bigger picture hasn’t broken yet. As long as ETH holds its higher lows and key EMAs on the daily chart, the structure remains constructive — just not as euphoric as some might like.

There’s also the overhang of large buyers like Tom Lee’s fund reportedly nearing the end of their ETH accumulation. That has spooked some traders (“who’s left to buy?”), but in practice, it simply shifts the focus from big institutional spot demand to broader market participation.

What “Uptober” really is (and isn’t)

Every year, crypto social media revives the same meme: “Uptober.” The idea is that October is one of Bitcoin’s best months historically, and therefore we should expect green candles and big moves.

From 2013 through 2025, Bitcoin closed October higher in 10 out of 13 years. Average gains fall somewhere in the mid-teens to high-teens percent range. That’s where the meme comes from.

But there are a few crucial caveats:

• The sample size is tiny — only 13 data points.
• A handful of monster Octobers (like 2013, 2017, 2021) skew the average much higher.
• The market structure today (with spot ETFs, institutional flows, and derivatives) is very different from the early years.

And then there’s 2025: Bitcoin hit an all-time high around $126,000 on October 6, then suffered the infamous 10/10 event, where roughly $19 billion in leveraged positions were liquidated in minutes. October still only closed down about 4%, but that headline number hides a brutal mid-month wipeout.

The lesson: October is not magic. It’s a calendar pattern, not a law of nature. It tends to work best as a tailwind when liquidity is already expanding and forced sellers have been cleared out — not as a standalone trading signal.

ETF flows, liquidity, and why Uptober depends on context

The real engine behind big Q4 rallies isn’t the name of the month. It’s liquidity.

Research from multiple firms suggests that:

• Global liquidity (how much easy money is sloshing around the system) is a major driver of Bitcoin’s long-term trend.
• Spot Bitcoin ETFs tend to lead price by a few months — when inflows surge, price often follows with a lag.
• Seasonal patterns like Uptober tend to line up with periods when liquidity is already improving.

Over the last 30 days, U.S. spot Bitcoin ETFs have seen around $3.1 billion in net inflows. That’s a strong number. However, the pace of those inflows has cooled significantly in the last week or two. Most of that $3.1 billion came earlier in the period, not recently.

If ETF inflows stay sluggish and we see more profit-taking after the August–September bounce, the market might need a period of sideways chop or even a deeper correction before it can meaningfully push higher again. Historically, early October has often been softer, with the real Q4 strength showing up in mid-to-late October.

The bottom line: treat Uptober as context, not a trading system. Watch ETF flows, liquidity conditions, and macro data. Don’t size your positions just because a meme says October should be green.

Altcoins: the “others” chart is flashing a rare signal

While everyone stares at Bitcoin and Ethereum, something important is happening under the surface in the broader altcoin market.

There’s a chart often referred to as “Others” — essentially the combined market cap of all coins outside the top 10. No BTC, no ETH, no BNB, no Solana; just the long tail of altcoins.

On the monthly timeframe, this chart is showing two big developments:

1. A potential bullish MACD crossover forming for the first time in years. The last two times this happened were in mid-2020 and October 2023. These crossovers marked the start of massive altcoin uptrends.
2. A giant multi-year consolidation pattern — effectively a huge triangle — with price repeatedly bouncing off a long-term support trendline.

Since the 2021 peak, “Others” has gone essentially nowhere in net terms. The moves we saw in 2023 were more like bear-market rallies than a true breakout, as the market failed to print new highs. But all that sideways pain has built a large base.

When this structure finally resolves to the upside, the implied target is substantial. Depending on how you measure the pattern, the altcoin market cap outside the top 10 could reasonably aim for the $800 billion to $1 trillion range at cycle peak.

From current levels, that’s roughly a 200%–300% move for the aggregate “Others” basket. Individual winners, of course, can do far better — and individual losers can still go to zero.

Total market ex-Bitcoin: echoing the same story

The “Total 2” chart — which tracks the entire crypto market cap excluding Bitcoin (so it includes ETH, SOL, etc.) — is telling a similar story. It has been forming a large bullish ascending triangle for nearly five years.

Ascending triangles are typically continuation patterns. They represent a market where buyers are willing to step in at higher and higher lows, even as overhead resistance caps price for a while. Once that resistance gives way, the follow-through can be powerful.

Altcoin dominance has also broken out of a five-year downtrend, with the monthly MACD in the green for seven consecutive months — the longest such streak since 2020. That’s exactly how the 2020–2021 altcoin season started: slowly, then suddenly.

Altcoins vs. fundamentals: why narrative still rules

One of the ongoing puzzles in crypto is the disconnect between fundamentals and price. Some networks with strong usage and revenue remain relatively undervalued, while others with weak adoption and modest on-chain activity still command huge market caps.

Take Cardano as an example. On many metrics, its on-chain activity lags far behind its valuation. Yet whale activity and social dominance have recently surged to multi-month highs, and the price structure is in an uptrend, with potential support forming near the 200-day EMA.

Why? Narrative and community. Cardano has a deeply committed holder base, a charismatic founder, and a strong brand. In crypto, those soft factors often matter as much as, or more than, raw usage metrics — especially during speculative phases of the cycle.

The same is true in the other direction. Some Solana DeFi protocols, for example, are throwing off serious revenue and using buyback or revenue-sharing models to reward token holders, yet still trade at valuations that look cheap relative to comparable Ethereum DeFi projects.

Solana, Sui, and the new infrastructure plays

Solana continues to act like one of the strongest majors in the market. Even after pullbacks, its chart is still clearly in an uptrend, with room for healthy retests of the 20-day and 50-day EMAs. As long as major trendlines hold, dips are more likely to be bull-market noise than the start of a new bear phase.

Under the hood, Solana DeFi is where a lot of the action is. Protocols like DEXes and launchpads are generating substantial daily revenue, with many using that income for token buybacks or direct revenue sharing. This “revenue meta” — where tokens are backed by real cash flows — is one of the more durable narratives to emerge from this cycle.

Sui is another infrastructure name to watch. In recent live tests, the network processed over 40 million transactions per second using off-chain channels that settle back to mainnet. With features like gasless stablecoin transfers and a design that could be attractive for AI agents, Sui has the potential to surprise the market in a similar way Solana did in the last cycle — especially if developers and users start to pile in.

Speculation, leverage, and surviving altcoin volatility

If the altcoin market is indeed on the verge of a major breakout, it won’t be a smooth ride. Historically, your coins can easily drop 20–50% multiple times on the way to a 200–500% gain. That’s just how crypto trades.

To survive and actually benefit from these moves, you need to accept a few realities:

• Volatility is the cost of admission. If 30% drawdowns make you panic-sell, position sizes are probably too big.
• Most altcoins are still highly speculative. Many will never reclaim their old all-time highs, no matter what the market does.
• Leverage can turn a normal correction into a total account wipeout. If you use it, do so with strict risk management and clear invalidation levels.

Over the last five years, the top 200 coins (market-cap weighted) are up only about 5% from October 2021. That’s astonishingly flat given how much noise and volatility there has been. The main reason? New token supply and constant rotations have eaten into returns.

The good news is that new supply growth has dropped dramatically — from around 26.5% a year to just 3.3% — while payouts to holders (via buybacks, revenue sharing, and staking) have increased. Demand is still below its long-run trend, but that gap is exactly what creates opportunity if and when it snaps back.

AI stocks, bubbles, and why crypto may be next in line

Outside of crypto, AI stocks have been the main liquidity magnet. Companies like Nvidia, Microsoft, and other AI-linked names have seen huge price repricing as capital has chased the AI narrative.

Some prominent investors, including Michael Burry and Ray Dalio, are warning that the AI boom is increasingly being financed by circular lending and spending — companies borrowing to buy each other’s services and hardware, all premised on AI revenues growing forever. If AI spending disappoints, that loop could break.

Burry may well be right about the eventual outcome, but there’s a crucial timing risk. As Stanley Druckenmiller has pointed out from his own experience shorting the dot-com bubble too early, being right too soon is still being wrong as a trader.

One plausible scenario is that AI-related equities continue higher for a while longer, and at some point, liquidity rotates more aggressively into under-owned assets like Bitcoin and altcoins. Crypto has dramatically underperformed the S&P 500 and Nasdaq since 2021, and markets don’t tolerate such large dislocations forever.

Practical takeaways for the months ahead

Pulling all of this together, here are the key ideas to keep in mind:

• Bitcoin and Ethereum are in corrective mode, but their larger bull structures remain intact so long as key EMAs and higher lows hold.
• Tom Lee and historical midterm data both argue for a strong Q4 and solid 12-month period ahead, though short-term volatility is likely.
• Uptober is real in a statistical sense, but not guaranteed. Liquidity and ETF flows matter far more than the calendar alone.
• Altcoin market structure (both in “Others” and Total 2) is hinting at the early stages of a new altseason, with rare bullish signals forming on monthly charts.
• Fundamentals and narratives don’t always align in the short term. Strong communities and sticky memes can keep some projects afloat longer than expected, while genuinely productive protocols can remain underpriced until the market notices.
• Risk management is everything. Expect sharp pullbacks even in a bull market, and size positions so you can survive them.

If you’re looking to go deeper into how these rejections and macro drivers fit into Bitcoin’s bigger picture, it’s worth reading this analysis of why lower prices can still be bullish for BTC and the key risks no one talks about.

In the end, the name of the month doesn’t move markets. Liquidity, positioning, and human psychology do. Right now, all three are lining up in a way that could make the coming months some of the most important of this cycle — especially for altcoins.