The market structure is significantly different today, said one of the analysts we talked to.
ByJordan Lyanchev
Bitcoin enters the final quarter of the year after a powerful recovery in the third quarter, but analysts warn against expecting another straight-line rally. Instead, they pointed to some key factors that could impact BTC and the overall market in the following three months.
Some of them include the Federal Reserve, Treasury-market liquidity, ETF flows, geopolitics, and BTC’s ability to clear $87,500, which remains its most significant obstacle on the path forward.
Q3 May Be Hard to Repeat
Although Q3 began with another leg down
Although Q3 began with another leg down to under $58,000, which became BTC’s lowest price tag in a year and a half, the subsequent three months were a lot more positive. The cryptocurrency rebounded immediately and broke out in mid-August to over $80,000. Its rise continued and managed to close the quarter with a massive 43% surge.
Iliya Kalchev, Nexo Dispatch Analyst, described the three-month period as both a recovery phase and a breakout milestone. He argued that the most important catalyst arrived from the bond market after the US Treasury increased the size of its long-end bond buyback operations in August.
The asset indeed jumped by 7% on August 19 and rocketed by over 20% in the following several days. Spot Bitcoin ETF flows immediately turned positive and even flipped into the green on a year-to-date basis. Meanwhile, relatively subdued perpetual funding suggested the rally was driven more by spot demand than excessive leverage, Kalchev added.
Nevertheless, the analyst cautioned against assuming Q4 will simply extend Q3’s pace. Although the cryptocurrency has finished Q4 higher in nine of the past 15 years, the median gains are only around 9%, while the much larger average has been distorted by spectacular years such as 2013 and 2017.
Alex Kozenko, CMO at WhiteBIT, issued a similar warning:
