Markets
Will Q4 bring recovery or regression?
- Bitcoin struggles to stay above bull market support range as Q4 approaches.
- Analysis of historical trends suggests a possible further rise or fall in the fourth quarter of 2024.
Bitcoin [BTC] The price saw a notable drop last week, falling to the $53,000 level for the first time since February. This downward trend continued earlier this week.
However, the cryptocurrency has managed a slight recovery, currently trading above $55,000. Despite this recovery, Bitcoin remains down 2.4% over the past 24 hours, with a trading price of $55,704 and a 24-hour low of $54,320.
Amid this, prominent cryptocurrency analyst Benjamin Cowen recently taken to social media platform X to discuss the implications of Bitcoin’s current price movements and its possible trajectory through the end of the year.
According to Cowen, Bitcoin’s recent performance could be indicative of a “summer lull,” a pattern seen in previous cycles. His analysis suggests that the cryptocurrency’s future in Q4 hinges on its ability to reclaim and hold key price levels in the coming weeks.
Bitcoin’s Likely Performance in Q4
Before we delve into Q4 projections, it is essential to understand what a Bull Market Support Band (BMSB) is.
This technical indicator combines the 20-week moving average and the 21-week exponential moving average, serving as a critical support region in bull markets.
A sustained position above this range is typically seen as bullish, while a drop below it may signal bearish conditions.
Cowen points out that Bitcoin is currently testing this support band. If historical patterns hold true, Bitcoin’s behavior relative to the BMSB over the summer could set the stage for its performance in Q4.
For example, in 2023, after a brief dip below the BMSB, Bitcoin experienced a significant rally in Q4. Similarly, in 2013 and 2016, periods after a dip below this band saw substantial upward movements.
Digging deeper, Cowen draws parallels to years past where Bitcoin faced similar dips during the summer months. He notes that in years like 2019, when Bitcoin remained below the post-summer BMSB, the fourth quarter tended to be bearish.
On the other hand, years that showed a recovery above the BMSB often showed strong recoveries in the fourth quarter.
Current market dynamics show Bitcoin struggling to climb back above the BMSB. Cowen speculates that the outcome of this struggle could lead to a repeat of the strong recoveries seen in 2013 and 2016 or mimic the quieter Q4 of 2019.
This uncertainty makes the next few weeks crucial in setting the tone for the rest of the year.
Current market fundamentals
Coming back to the fundamentals of Bitcoin, there is a notable decline in whale transactions, with a significant drop from 17,000 to less than 12,000 in just one week.
This drop could indicate a cooling of interest from larger investors or a potential consolidation phase.
Source: IntoTheBlock
Furthermore, Bitcoin open interest decreased slightly by 2%, now at $27.62 billion. However, there was a sharp increase in the volume of open interest, which increased by 32.91% to $57 billion.
This increase in trading volume amid declining open interest suggests that while there are fewer open positions, the transactions that are occurring are more significant.
Source: Coinglass
Additionally, Bitcoin’s market value to realized value (MVRV) ratio, a measure of market profitability, is at 1.816.
A ratio above one typically indicates that the average holder is in profit, which may suggest that despite recent price declines, overall market sentiment remains somewhat positive.
Source: CryptoQuant
As the fourth quarter approaches, the market remains at a critical juncture.
To read Bitcoins [BTC] Price forecast 2024-2025
Bitcoin’s ability to recover above critical technical levels will likely dictate the direction of the market in the coming months, potentially setting the stage for the next major rally or continued consolidation.
On the other hand, AMBCrypto recently reported that Bitcoin the background may be in as the increase in on-chain realized losses indicates that another BTC rally was near.