Bitcoin enters a period of positive seasonality, but there is a catch: CryptoQuant

Bitcoin (BTC) tends to perform well during the fourth quarter of bull cycle years, especially after halving events. CryptoQuant analysts say this year will be no different; however, things don’t add up.

According to a report by CryptoQuant, the apparent growth in demand for Bitcoin is still slow, and will need to grow at faster rates to drive and sustain the price increase in the fourth quarter.

BTC demand must be collected

Seasonal performances seen in 2012, 2016, and 2020, which are half-years, saw increases of 9%, 59%, and 171%, respectively, for the price of BTC. Through 2024, bitcoin’s performance has been similar to the patterns seen in 2016 and 2020, indicating a strong likelihood that the price will rebound in the coming months.

The only difference between 2024 and 2020 is that BTC entered the fourth quarter of this year, moving between bullish and bearish phases, while the asset entered the fourth quarter of 2020 in a clear bullish phase. The CryptoQuant Bull-Bear market cycle indicator tracked this move, indicating that BTC had been floating between bullish and bearish phases for the past three weeks.

Demand must grow for BTC to remain stable in the bullish phase. Based on past trends, analysts expect it to pick up again, possibly leading to an increase in supply in the near term. The launch of spot Bitcoin exchange-traded funds (ETFs) in early 2024 led to a surge in supply, reflecting strong demand as long-term holders sold to new buyers.

Currently, the apparent growth in Bitcoin demand seems muted, and has been since July, ranging from -23,000 to +69,000 BTC monthly. This metric grew by 496,000 BTC in April, when the asset was around $70,000; therefore, there is a lot of room for growth in the fourth quarter.

BTC is targeting $85,000-$100,000

Spot Bitcoin ETFs in the United States are already showing signs of increased demand. They went from net selling 5,000 BTC in early September to buying roughly 7,000 BTC by the end of the month. Analysts said this is the highest daily buying since July 21.

Meanwhile, on-chain data valuation metrics suggest that BTC could rise to $85,000 or $100,000 once prices pick up in Q4. Analysts called these target prices the upper and upper levels of the bands realized in the merchant chain.

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