CryptoQuant analysts say Bitcoin is entering a period of positive seasonality, but an increase in demand is required for the price of BTC to reach $100,000 in Q4.
Generally, Bitcoin has performed well in October when in a bull cycle, particularly in a halving year like 2024 and that period of positive seasonality is typically maintained throughout the fourth quarter of the year.
In its weekly report published on Oct. 2, the market intelligence firm explained that in previous Bitcoin halving years, 2012, 2016 and 2020, Bitcoin (BTC) price has increased by 9%, 59% and 171%, respectively.
“Bitcoin’s performance so far in 2024 has been similar to 2016 and 2020 up to September,” CryptoQuant analysts added.
CryptoQuant’s Bull-Bear Market Cycle Indicator shows that Bitcoin remained in the BULL (orange area) phase between March and August.
However, the graph below shows that the price has been trading in a BEAR phase for three weeks between August and September and now enters the last quarter sealed “between the BULL and BEAR phases.”
In comparison, Bitcoin entered Q4 in 2020 in a clear bull phase, making this year’s entry into the last quarter relatively weak.
Bitcoin Bull-Bear Market Cycle Indicator, 2020 vs. 2024. Source: CryptoQuant
The report also highlights that Bitcoin’s apparent demand seems to have stopped declining, although it needs to grow faster to sustain higher prices in Q4.
The chart below reveals that Bitcoin’s apparent demand growth has stalled since July, oscillating between -23,000 and +69,000 BTC on a monthly basis. In comparison, Bitcoin’s apparent demand grew by as much as 496,000 BTC in April, when the price was hovering around $70,000.
“It seems that demand has a lot of room to grow in Q4.”Bitcoin apparent demand. Source: CryptoQuant
CryptoQuant analysts say that institutional demand through US-based Bitcoin exchange-traded funds (ETFs) is key for further BTC price growth. They note that these investment products shifted from net selling of 5,000 BTC to net buying of 7,000 BTC between Sept. 2 and Sept. 30.
“If ETF demand continues to accelerate it can have the effect of propel prices up in the last quarter of 2024”
Daily change of BTC holdings of spot Bitcoin ETFs. Source: CryptoQuant
According to data from SoSoValue, spot Bitcoin ETFs saw $1.8 billion in net inflows between Sept. 13 and Sept. 30, suggesting increased institutional demand for these investment products in anticipation of higher BTC prices in Q4.
Total spot Bitcoin ETF netflow. Source: SoSoValue
Meanwhile, London-based asset manager CoinShares said that the “approval of options for certain US-based investment products likely boosted sentiment” resulting in more than $1 billion in inflows into Bitcoin investment products between Sept. 23 and Sept. 27.
According to CryptoQuant, if demand continues to grow, Bitcoin could target between $85,000 and $100,000 by the end of December.
“On-chain data valuation metrics suggest Bitcoin could be targeting $85K-$100K in Q4 in the context of recovering demand and positive seasonality.“
Bitcoin trader onchain realized price bands. Source: CryptoQuant
Market participants now turn their attention to the increasing geopolitical tensions in the Middle East and how Bitcoin price reacts. They will also focus on the health of the US job market and the Federal Reserve’s future interest rate cuts in 2024 following an aggressive 50 basis point cut on Sept. 18.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
