Bitcoin history is to struggle with dwindling demand forcing the virtual asset into bear market territory for periods of time. Nonetheless analysts opine the cryptocurrency will hit new highs before the year ends.
The revival in interest for bitcoin ETF’s is a healthy sign for the price in the medium term – but the appetite for bitcoins underlying those funds remains icy and needs to be improved if bitcoin is to post all-time highs, as articulated by CryptoQuant. It is presently 18% off the all-time high recorded back in March this year. This quarter the agency projected it will attain between $85000 and $100000.
“Currently the total market cap of Bitcoin is vast at $1.2 trillion, so the liquidity is high,” said John Todaro, a crypto analyst at Needham, speaking to CNBC. “There is a high volume of buying activity, but there are also a lot of sellers.”
“Moving in an outsized direction any bitcoin price changes during such weeks really does require… a substantial buying demand.” he concluded. “Whereas bitcoin total volume may exceed tens of billions in a day overall ETF volumes are more in the hundreds of millions.”
After net selling an amount of 5,000 BTC on September 2, bitcoin ETFs at the end of September net bought 7,000 bitcoins, crypto quant data reported showing the highest daily purchase after July 21. Should that uptrend persist, it may push pricing even more between now and the end of the year. (In the first quarter that followed their launch in January, bitcoin ETFs, on average, purchased around 9,000 BTC on a daily basis.)
Despite being roughly around $60000 at present, the fourth quarter of a bitcoin bull cycle is characterized by enormous increases, particularly when there is a halving event taking place within that period. In the Latter Parts of 2012, 2016, and 2020 — the periods with Previous Treats of Halving Events – the prices for bitcoin increased by 9%, 59%, and 171% correspondingly. The latest one occurred just this past April.
Since then, the stocks have reached at a newer highest levels, both U.S. presidential candidates voiced sweet words about crypto, the Fed eased the rates and China’s central bank also opted for a series of rate cuts.
“Had someone said in March that the S&P would be reading above [5,700], we would have assumed that BTC was somewhere close to $100,000,” Wolfe Research analyst Rob Ginsberg said in a recently published report. “Rather it has been the contrary. … It would not be wrong to opine that although the markets have reached higher levels, the world of crypto has been in recession as of March.”
Bitcoin should display positive performance in the last three months of the year; however, it is still undergoing the impact of supply overhang caused by the governments of the U. S. and Germany as well as by settling claims with the Mt. Gox creditors. Additionally, a number of traders are waiting to observe the effects of the U.S. presidential elections and, of late, the Middle East has also been quite tense.
Owen Lau, another analyst with Oppenheimer, indicated the demand for bitcoin that incorporates uncertainty hedging.
“Bitcoin is no longer confined to a region and should be sensitive to any easing policy that will create inflationary expectations in the future,” he said. “These uncertainties may spike bitcoin volatility and trading in the short term, which is a plus for Coinbase.”
