Historical data shows that bitcoin (BTC) has performed well in the fourth quarter of previous bull cycles, especially during halving years. Current on-chain data shows that the leading cryptocurrency is following previous patterns and is on track for another notable fourth quarter.
A report from market analytics platform CryptoQuant reveals that the bitcoin price rally in the coming weeks could be sustainable as demand for the asset is recovering and growing at its fastest monthly pace since April.
Bitcoin has positive seasonal performance
In bitcoin's seasonal performance in 2012, 2016, and 2020, the cryptocurrency gained 9%, 59%, and 171% respectively in the fourth quarter. CryptoQuant analysts found that BTC is behaving very similarly to the patterns seen in 2016 and 2020.
This positive performance was driven by a surge in apparent demand for BTC, which recorded a monthly increase of 177,000 BTC last week, the largest reading since April. Apparent demand refers to the difference between BTC production (miner issuance) and changes in its inventory (supply that has been dormant for more than a year). The metric reached 496,000 BTC in early April, shortly after BTC surged above $72,000 in March.
The rise in the metric comes ahead of a more than 5% rally in BTC prices. The cryptocurrency hit a ten-week high of $68,100 earlier this week and is trading at $67,900 at the time of writing.
Demand is increasing
Furthermore, the increased demand for BTC can be seen in the increased purchases of US Bitcoin spot exchange-traded funds (ETFs). These products have recently net purchased around 8,000 BTC, their highest daily purchases since July 21.
Large bitcoin investors (whales) are also expanding their holdings, with their balances increasing by 670,000 BTC per year. Additionally, the growth in whale holdings is higher than the 365-day moving average, which is considered a positive sign for the price.
CryptoQuant says that increased apparent demand for bitcoin is necessary for BTC to rally to a sustained record high. Historical data shows that positive and increasing apparent demand led to the BTC bull run in 2020-2021 and earlier this year. Apparent demand in those cases peaked at 490,000-550,000 BTC; however, current demand is 177,000 BTC. Therefore, there is still plenty of room for growth.
