The Aug. 5 market plunge reversed Bitcoin’s funding rate for margin positions, potentially setting the stage for a bullish fourth quarter.

Pseudonymous CryptoQuant analyst ShayanBTC said that Bitcoin’s (BTC) early-August decline may benefit the digital asset before this year ends. The dip to $49,000 triggered a massive deleveraging sweep, flushing nearly $1 billion in BTC longs. The slump also wiped out over $1.2 billion in crypto margin positions and reset funding rates to negative.

As a result, short sellers dominated leveraged positions. According to the CryptoQuant researcher, investors could view the development as a net positive “as it suggests the future markets are no longer overheated.”

BTC funding rates | Source: CryptoQuant

“Smart Money” remained optimistic about markets as Bitcoin whales padded their holdings by over 404,000 tokens in the last 30 days after last month’s brief ascent to $70,000 and the plunge below $50,000. CryptoQuant data indicated that the accumulation spree coincided with several liquidation events, including Germany’s $3 billion offload and over $6 billion in Mt. Gox creditor repayments.

Investors adding BTC to their coffers is usually bullish for the largest cryptocurrency and signals strong market sentiment adopted by long-term investors, especially when funding rates have declined and created more room for upside momentum.

You might also like: Total Recall: Why the crypto community still worries about the Mt. Gox collapse

Bitcoin could range lower before an uptick

While whales bought more BTC, Bitfinex analysts predicted on Aug. 5 that the token could retest support around $48,900 before charging toward all-time highs again. 

The assertion agrees with historical data showing that Bitcoin typically struggles in August and September. Gains achieved in July were wiped out by macro-driven market fear, but the year’s fourth quarter may bring relief for BTC.

Before global markets retraced, investors and markets widely expected Federal Reserve rate cuts in September. A dovish outcome at the Federal Open Market Committee meeting next month could direct much-needed liquidity into the crypto market and propel prices.

Read more: Deja vu? What Bitcoin’s past patterns reveal about its post-black Monday future