Bitcoin Could See More Gains, But Chain Data Shows Warning Signs – Bitfinex

The past week has been positive for bitcoin (BTC), with the asset breaking past its August 25 local high of $65,200 after multiple earlier rejections. While BTC is currently trading below the $65,000 range and could post further gains, analysts say there are warning signs.

According to a report from Bitfinex, there is a lack of aggression in the spot market, which indicates fading interest and the possibility that the price of bitcoin will approach equilibrium or a reasonable value based on market conditions. BTC needs a catalyst to re-ignite significant upward momentum.

The most positive September

As the fourth quarter begins, BTC is in a wide consolidation range between $50,000 and $68,000, a pattern we tend to see mid-year.

Last month, the most positive September on record in terms of monthly price developments, closed the leading digital asset up more than 7%. BTC recovered from its September 6 low of $52,756 by 25%. The asset’s rise above $66,500 marked its first significant move above a local high since early August 2024.

Bitcoin is now above key chain levels such as the short-term holder realized price (STHRP) of $62,750. Bitfinex says staying above this line is a crucial indicator for a bullish market trend.

Several historical patterns suggest that BTC may reach a new all-time high (ATH) towards the end of Q4 2024 or the beginning of Q1 2025. Bitfinex noted that this prediction depends on similar market dynamics and investor sentiment from the subsequent cycles to the previous half.

While these historical patterns and trends paint a positive picture, other on-chain data suggests that BTC may not see the significant bullish momentum needed to achieve a new ATH in the near term.

Warning signs

There has been a decrease in spot market aggression, the type of activity that indicates urgency to buy BTC at the current price. The flattening of spot market aggression coincides with an increase in open interest in the perpetual and futures markets, indicating that leveraged investor participation has also increased.

In addition, open interest in bitcoin has risen to $35.35 billion for the sixth time, raising concerns about potential market overheating. These increases have coincided with past local peaks, leading to eventual declines.

“This pattern suggests caution, as previous cases have typically preceded adjustments in price trends, indicating that we may be nearing another critical epoch in market dynamics,” Bitfinex explained.

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