CryptoQuant analysts say Bitcoin is entering a period of positive seasonality, but an increase in demand is needed for the BTC price to reach $100,000 in the fourth quarter.
Typically, Bitcoin performs well in October during bull cycles, especially during halvings such as 2024, and this positive seasonality typically persists throughout the fourth quarter.
In its weekly report released on October 2, the market intelligence company explained that the price of Bitcoin (BTC) rose 9%, 59%, and 171% in the previous Bitcoin halvings of 2012, 2016, and 2020, respectively.
“Bitcoin’s performance so far in 2024 has been similar to 2016 and through September 2020,” CryptoQuant analysts added.
CryptoQuant’s Bull-Bear Market Cycle Indicator shows that Bitcoin remained in the BULL (orange zone) phase between March and August.
However, the graph below shows that the price traded in the BEAR phase for three weeks between August and September and has now entered the final quarter, sealed as “between the BULL phase and the BEAR phase.”
In comparison, Bitcoin entered a distinctly bullish phase in the fourth quarter of 2020 and had a relatively weak entry into the final quarter of the year.
Bitcoin bull market cycle indicator, 2020 vs 2024. Source: CryptoQuant
The report also highlights that while faster growth is needed to sustain prices higher in the fourth quarter, Bitcoin’s apparent demand appears to have stopped declining.
The chart below shows that Bitcoin’s apparent demand growth has plateaued since July, fluctuating between -23,000 and +69,000 BTC per month. By comparison, apparent demand for Bitcoin increased by as much as 496,000 BTC in April, when the price hovered around $70,000.
“There appears to be a lot of room for demand to increase in the fourth quarter.”Demand for Bitcoin is clear. Source: CryptoQuant
CryptoQuant analysts say institutional demand via US-based Bitcoin exchange-traded funds (ETFs) is key to the rise in BTC prices. They note that these investment products changed from net selling of 5,000 BTC to net buying of 7,000 BTC from September 2 to September 30.
“If ETF demand continues to accelerate, this could have the effect of boosting prices in the fourth quarter of 2024.”
Daily fluctuations in BTC holdings in spot Bitcoin ETFs. Source: CryptoQuant
Spot Bitcoin ETFs saw net inflows of $1.8 billion between September 13 and September 30, according to data from SoSoValue, increasing institutional demand for these investment products in anticipation of a higher BTC price in the fourth quarter. It suggests that it was done.
Total Spot Bitcoin ETF Netflow. Source: SoSoValue
Meanwhile, CoinShares, a London-based asset management company, said, “Sentiment is likely to increase with the approval of options on certain US-based investment products,” which will lead to the September 23 to September 27 period. So far, more than $1 billion has flowed into Bitcoin investment products.
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According to CryptoQuant, if demand continues to grow, Bitcoin could target between $85,000 and $100,000 by the end of December.
“According to on-chain data valuation indicators, Bitcoin could target $85,000-$100,000 in the fourth quarter in the context of demand recovery and positive seasonality.”
Bitcoin Trader Onchain Realizes Price Range. Source: CryptoQuant
Market participants are now turning their attention to rising geopolitical tensions in the Middle East and how the Bitcoin price reacts. They will also focus on the health of the U.S. job market and the Fed’s upcoming interest rate cuts in 2024 after an aggressive 50 basis point cut on September 18.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.