These factors suggest that the Bitcoin (BTC) Bull Run has just begun: CQ

The price of Bitcoin fell below $50,000 in early August and below $53,000 in early September, which is historically a bad month for the asset.

However, it managed to bounce back and some factors provide a more optimistic outlook on the coming months in terms of price action for the largest digital asset.

Decrease in exchange reserves

CryptoQuant Analysis started its bullish forecast by describing the declining number of BTC stored on cryptocurrency exchanges. As reported yesterday, net bitcoin exchange flow shows mostly outflows, suggesting that investors have pulled their funds from trading platforms, reducing immediate selling pressure.

According to CQ’s outlook, these off-exchange transfers have historically been followed by price increases and new peaks.

Bitcoin Exchange Reserves. Source: CryptoQuant

The chart above shows two prominent examples from the past four years. At the end of 2020, BTC on the market declined substantially, and the asset soared to new all-time highs in early 2021.

Something similar happened in early 2023, but a new ATH happened about a year later. This suggests that while this is a bullish development, it could take months and even a year for this cycle to peak.

Stable coin reserves in motion

The second factor listed by CryptoQuant is also something we talked about yesterday: the increase in stablecoin reserves on exchanges. Just before BTC’s impressive $4,000 rally on September 9-10, $300 million in stablecoins entered trading platforms and serve as the most convenient gateway for investors to accumulate digital assets .

“… Stablecoin reserves on exchanges are increasing, indicating that investors are preparing to buy. Stablecoins represent capital ready to be deployed, and their growing presence suggests that traders are waiting for the right opportunity to enter the market. This increase indicates strong buying interest.” – read the CQ report.

General bullish sentiment

While resources such as the Fear and Greed index are still in “fear” territory, the CryptoQuant analyst said the overall market sentiment could be on the verge of a massive shift due to the two aforementioned factors previously

Additionally, October and November have historically been bullish months for bitcoin. This, combined with the upcoming US rate hikes and the presidential election (especially if Donald Trump wins), could lead to an inevitable BTC price breakout that could lead to new peaks by the end of the year or early 2025.

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