Asia holiday lull and US shutdown set uncertain tone for bitcoin in October: K33

Bitcoin starts October on an uncertain footing as China begins its annual Golden Week holiday season and Washington D.C. enters a partial government shutdown.

While thin Asian liquidity during this period typically points to a stagnant opening stretch this month for the world's largest cryptocurrency, delays to U.S. economic data from the U.S. government shutdown could disrupt that pattern and spark volatility, according to research and brokerage firm K33.

China's weeklong holiday begins Oct. 1, overlapping with South Korean market closures from Oct. 3 through Oct. 9 and other regional breaks. This annual lull in Asian participation has historically weighed on bitcoin, with K33 data generally showing flat or negative returns in the first week of October — though the 2021 rally was a key exception. "BTC typically behaves flat during the early October Asian holiday season," K33 Head of Research Vetle Lunde wrote in a new report, adding that volatility tends to compress toward local lows during this period.

While Golden Week may partly explain the sluggish trading, August through mid-October has historically seen a period of muted price action more broadly compared to the rest of the year, the analyst noted.

BTC/USD during Chinese Golden Week. Image: K33.

However, compounding the uncertain macro backdrop, the U.S. federal government entered a partial shutdown at 12:01 a.m. ET on Wednesday, after Congress failed to pass funding legislation. Many non-essential federal services have now been paused, furloughing workers and delaying critical data releases such as jobs and inflation reports. Combined with potentially muted Asian flows, Lunde warned that order books may thin out, leaving traders exposed to "erratic price action" during overlapping sessions, particularly early in October.

The drag from Asia is not new. Year-to-date compounded returns during the Asian trading session sit at –9.7%, with the region underperforming both Europe and the U.S. every year since 2021, save for a brief exception in 2022, K33 highlighted. Much of bitcoin's most meaningful upside in recent years has instead emerged during U.S. hours, particularly following the launch of spot ETFs. "Profit-taking and mean reversions in Asian hours amid lower relative liquidity may explain the Asian session's clear underperformance," Lunde said.

Cumulative BTC returns by trading session, 2025. Image: K33.

For now, bitcoin remains locked in consolidation. After recovering from late-September lows, it closed the month up 4.7% at around $114,120, according to The Block's BTC price page, currently trading up 2% on Wednesday at $116,412.

Derivatives metrics also continue to signal caution, Lunde noted, with CME open interest falling to five-month lows, funding rates hovering below neutral, and options traders still favoring puts. High leverage across perpetual swaps leaves the market vulnerable to volatility spikes if positioning unwinds, he warned.

'Long SOL, short LTC' amid Grayscale overhang for altcoin ETFs

Following the Securities and Exchange Commission's new generic listing standards, spot exchange-traded funds for altcoins such as Solana and Litecoin are expected within weeks, though the U.S. shutdown could push timelines back.

Lunde highlighted the key asymmetry of the "Grayscale overhang" in various altcoins, noting that for both the Bitcoin and Ethereum ETFs, conversions from Grayscale trusts saw 50% of their notional AUM supply flood the market in the first 200 trading days. "In smaller altcoins, nuanced but fundamentally important differences in the Grayscale percentage ownership of the circulating supply set the stage for intriguing long-short trades," he said.

Solana and Litecoin are the most accurate comparisons, having been publicly traded in recent years, compared to the private structure of Grayscale's XRP and Dogecoin products, the analyst explained.

Grayscale's Solana trust holds just 0.1% of the circulating SOL supply, and it has never traded at a discount, meaning there is little risk of forced selling once converted, Lunde said. Meanwhile, Solana demand is further supported by several other SOL ETF filings and substantial digital asset treasury strategies.

However, that contrasts sharply with Litecoin as Grayscale already controls 2.65% of LTC's float, and its trust has repeatedly traded at steep discounts — much more comparable to the prior GBTC and ETHE conversions. Combined with only a few issuers pursuing an LTC ETF comparatively, Lunde said a "long SOL, short LTC" trade may be attractive if the ETF launches occur in tandem.

Grayscale percentage of total float before ETF launches. Image: K33.

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