Bitcoin is entering a traditionally positive performance phase, according to the latest analysis from Cryptoquant and its researchers. However, for bitcoin to reach new highs, increased demand will be important as current levels remain stagnant.
'Demand still has room to grow'
Cryptoquant’s latest report highlights bitcoin’s strong historical performance in Q4, especially in the years following halvings. In 2012, 2016, and 2020, bitcoin saw gains of 9%, 59%, and 171% in Q4, respectively. By the end of September 2024, bitcoin’s price trend closely mirrors that of previous halving years, leading to optimism for continued growth.
The report published on cryptoquant.com states: "Bitcoin's apparent demand growth has remained essentially flat since July, fluctuating between -23,000 and +69,000 bitcoins per month."
Additional analysis:
For comparison, apparent demand for bitcoin rose to 496k bitcoins in April, when the price hovered around $70k. It seems demand still has plenty of room to grow in Q4.
Despite the recent downturn, exchange-traded funds (ETFs) in the United States continued to absorb BTC in late September, with a net purchase of 7,000 bitcoins by the end of the month.
According to Cryptoquant (CQ), this trend could indicate a recovery in demand, a key factor driving prices higher in the seasonal fourth quarter. The report stated:
If ETF demand continues to accelerate, this could drive prices higher into the final quarter of 2024.
If demand continues to improve, CQ’s report suggests that bitcoin could hit a target of $85,000 to $100,000 by the end of 2024. These levels align with the upper range of on-chain traders’ actual price bands, where traders typically take profits. CQ’s analysis concludes that with recovering demand and favorable seasonality, bitcoin could experience another significant rally before the end of the year.
Despite strong demand for bitcoin, the digital asset succumbed to a global market downturn on Monday as tensions in the Middle East escalated. BTC fell to a low of $60,164 on Bitstamp after the CQ report was released. The decline affected U.S. stocks, risk assets, and the broader crypto market, while gold and silver escaped the turmoil to post gains. Macroeconomic events often impact markets across the board, and news like this can come out of the blue, leaving few assets unaffected.
What do you think of CQ's latest report? Please share your thoughts and opinions on this topic in the comments section below.
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