The crypto market closed September in the green, which historically leads to a bullish October, according to a report.

"Crucially, we've closed September in the green, a rare occurrence," Bitfinex analysts said in a note sent to The Block. Data from TradingView confirms this, showing the combined cryptocurrency market cap at around $1.029 trillion at the start of September, but finishing the month up 6.1%, at $1.092 trillion.

According to this week's Bitfinex Alpha report, futures market metrics support a forecast for a bullish month ahead. "Historically, a positive September ushers in a bullish October, and the volatility as well as the futures market metrics all point towards increased volatility and some upside, at least on the higher time frames," the analysts added.

The report added that the cryptocurrency options market has started signaling this increased market volatility. "Potential price swings in bitcoin became evident when implied volatility exceeded historical volatility, which is often a reliable indicator that traders are expecting much higher volatility in the near future,"

Long-term holders supporting the bitcoin price

The report cited on-chain data that showed the current price was being supported by dynamics between long-term holders, and short-term holders who are "a little more willing to sell."

"Indicators show that seasoned long-term investors are determined to remain holders at the current price range," the report added.

The report said that bitcoin held between 6-12 months is still largely stationary and that BTC +1.72% supply aged more than three years remains largely inactive since February 2023. "Long-term holders of BTC have been resolutely in 'HODL' mode," Bitfinex analysts said.

Bitcoin, the chief barometer for crypto market sentiment, has a historical tendency to perform poorly in September. Nine of the total 13 prior Septembers have had negative returns open to close. However, this September bucked the trend. The digital asset started last month at around $25,400 but exited at just shy of $28,000.

The world's largest digital asset by market capitalization is now changing hands for $27,387, down 2% in the past 24 hours, at 1:00 p.m. ET, according to CoinGecko.