Bitcoin closed the third quarter with a 43% surge after rebounding from its lowest price tag in a year and a half, but analysts say Q4 will likely be harder to repeat. They point to the Federal Reserve, Treasury-market liquidity, ETF flows, geopolitics, and the $87,500 level as the factors that will decide the quarter.
Bitcoin enters the fourth quarter on the back of a powerful Q3 recovery, but analysts are cautioning against expecting another straight-line rally. They point instead to the Federal Reserve, Treasury-market liquidity, ETF flows, geopolitics, and Bitcoin's ability to clear $87,500 as the factors that will shape the next three months.
A Third Quarter That Started Rough and Ended Strong
Q3 opened with another leg down to under $58,000, Bitcoin's lowest price tag in a year and a half. The cryptocurrency then rebounded and broke out in mid-August to over $80,000, closing the quarter with a 43% surge.
Iliya Kalchev, Nexo Dispatch Analyst, described the period as both a recovery phase and a breakout milestone. He argued the most important catalyst came from the bond market, after the US Treasury increased the size of its long-end bond buyback operations in August. Bitcoin then jumped 7% on August 19 and rocketed over 20% in the following days.
ETF Flows Turned Positive, But Q4 History Warns Against Repeats
Spot Bitcoin ETF flows immediately turned positive and flipped to the green on a year-to-date basis. Meanwhile, relatively subdued perpetual funding suggested the rally was driven more by spot demand than by leverage, Kalchev added.
Still, the analyst cautioned against assuming Q4 will simply extend Q3's pace. Bitcoin has finished Q4 higher in nine of the past 15 years. The median gain is only around 9%, while the much larger average has been skewed by outlier years such as 2013 and 2017. Alex Kozenko, CMO at WhiteBIT, issued a similar warning about the quarter ahead.
Source: CryptoPotato
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