Bitcoin (BTC) rose to an intraday high of $62,338 on October 4, as stronger-than-expected September employment data and bullish on-chain indicators added tailwinds to ideas of a fourth-quarter rally.
BTC/USD daily chart. source: TradingView
Bitcoin’s price action came as U.S. non-farm payrolls in September came in at 254,000, well above the expected 147,000. The unemployment rate fell from 4.2% in September to 4.1%, below the forecast of 4.2%.
As a result, market participants are starting to see a whopping 97% chance of a 25 basis point rate cut at the Fed’s next meeting on November 7, following an aggressive half-point rate hike last September, according to CME Group’s FedWatch data. equipment.
Another possible driver of Bitcoin’s “Uptober” idea and fourth quarter rally is the continued decline in BTC held on centralized exchanges.
According to data from CryptoQuant, there is a total of over 2.8 million BTC on centralized exchanges, the lowest since November 2018 and 500,000 less than the amount seen in March.
Bitcoin balance exchange. Source: CryptoQuant
An exchange’s Bitcoin holdings represent the number of BTC coins held in known exchange wallets. Low balances indicate a decrease in available liquidity, which in some scenarios may lead to bullish price movements.
Data shows that exchange balances have plummeted 12% over the past six months, while Bitcoin remains in a wide range ranging from $50,000 to $72,000. The decline in balances is relatively similar to what was seen between March 2020 and November 2020, before Bitcoin continued its upward trend to its 2021 high of $69,000. If history repeats itself, the decline in Bitcoin holdings on exchanges could be a harbinger of BTC price rising to new record highs.
Another headwind for Bitcoin as the fourth quarter unfolds is increased institutional demand via US-based spot Bitcoin ETFs.
relevant: Buying this Bitcoin dip ‘isn’t scary’ — Hedge fund manager
Additional data from CryptoQuant shows that institutional investors went from selling a net 5,000 BTC on September 2 to buying an average of 7,000 BTC by the end of September. This is the highest daily purchase amount for these investment products since July 21, when net purchase volume exceeded 9,000 BTC. This demand has driven the price of Bitcoin to its current all-time high of $73,835 in the first quarter of 2024.
“If this trend continues, prices may rise further in the fourth quarter of 2024.”
Daily change in total spot Bitcoin ETF holdings. Source: CryptoQuant
Before the much-anticipated fourth quarter rally begins, cryptocurrency analyst Timothy Peterson believes Bitcoin price could fall first to stabilize the adoption curve at $57,000.
source: Timothy Peterson
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.