Bitcoin Enters Positive Seasonality Period, But There’s a Catch: CryptoQuant

Bitcoin (BTC) usually performs well in the fourth quarter of bull cycle years, especially after halving events. CryptoQuant analysts say this year will be no different; however, things are not adding up.

According to a CryptoQuant report, Bitcoin’s apparent demand growth is still slow, and it will need to grow at faster rates to propel and sustain price rises in Q4.

BTC Demand Needs to Pick-up

Seasonal performances seen in 2012, 2016, and 2020, which are all halving years, recorded increases of 9%, 59%, and 171%, respectively, for the price of BTC. So far in 2024, bitcoin’s performance has been similar to patterns seen in 2016 and 2020, indicating a high chance that the price would rally in the coming months.

The only difference between 2024 and 2020 is that BTC entered Q4 hovering between the bull and bear phases this year, while the asset entered Q4 2020 in a clear bull phase. The CryptoQuant Bull-Bear Market Cycle Indicator tracked this movement, signaling that BTC had been hovering between the bull and bear phases for the past three weeks.

Demand needs to grow for BTC to remain steady in the bull phase. Based on past trends, analysts expect it to resume, possibly leading to an increase in short-term supply. The launch of spot Bitcoin exchange-traded funds (ETFs) earlier in 2024 caused a spike in supply, which reflected high demand as long-term holders sold to new buyers.

Currently, Bitcoin’s apparent demand growth appears muted, and it has been so since July, oscillating between -23,000 and +69,000 BTC monthly. This metric grew by 496,000 BTC in April when the asset was hovering at $70,000; hence, there is a lot of room for growth in Q4.

BTC Targets $85K to $100K

Spot Bitcoin ETFs in the United States are already showing signs of increasing demand. They moved from net selling 5,000 BTC in early September to buying roughly 7,000 BTC by the end of the month. Analysts said this is the highest daily purchase since July 21.

Meanwhile, on-chain data valuation metrics suggest BTC could rally to $85,000 or $100,000 once prices pick up in Q4. Analysts called these target prices the upper and maximum levels of traders’ on-chain realized bands.