Bitcoin went through a harsh Q2 in 2024 with minor gains in Q3.
Long-term holders appear to be dumping their positions, while short-term holders are gaining confidence.
Bitcoin’s momentum is weakening and crypto analysts are divided. Will Bitcoin crash or soar?
Bitcoin remains a top-performing asset and is ahead of other commodities like gold and oil.
In conclusion, we might see another short-term dip. However, long-term prospects remain firm.
Q4 of 2024 has just started and Bitcoin is at the center of market speculation.
Amid the ongoing price fluctuations, market insights have shown some interesting patterns between long-term and short-term holders.
Considering Bitcoin’s lackluster performance in Q3, price action across the market has been resilient so far.
Let’s see what’s been up so far and the major things to know about Bitcoin this week.
To start with:
The most recent on-chain data shows that shows something interesting about long-term Bitcoin holders.
This cohort (often referred to as LTHs) typically holds their BTC for more than 155 days.
Data from CryptoQuant shows that the LTHs are now taking profits after Bitcoin experienced a period of sustained growth.
Bitcoin LTH versus STH behaviors
CryptoQuant noted that the realized cap of the LTHs dropped by $6 billion recently.
This happened after it fell from $19 billion to $12 billion.
In essence, this massive dump shows that seasoned holders are selling off a portion of their holdings.
It also means that they are capitalizing on prior gains (likely from Q1 and Q2).
For some context, the realized cap is simply the value at which all coins were last moved.
A drop in this metric when it comes to LTH often points toward profit-taking.
This is true especially when it happens alongside other factors like slowing momentum or a shift in market sentiment.
On the flip side, the short-term holders (also called STHs) who generally hold Bitcoin for less than 155 days are now doing the opposite.
Recent data shows that this class of investors is becoming more confident. They have increased their BTC holdings by $6 billion (interestingly the same figure as the LTHs).
This shows a greater willingness on their part to take on risk.
On the flip side, the market is also experiencing close interactions between spot prices and the realized price of Bitcoin.
At the time of writing, the realized price of Bitcoin from last week is around $62,080 (which is also very close to the current spot price).
According to analyst Amr Taha from CryptoQuant, this repeated interaction between spot and realized price indicates something interesting.
Traders are keeping a close eye on this price level.
The rejections around $63,000 and $65,000 recently, indicate that traders are keeping a close eye on these levels.
These rejections whenever Bitcoin fails to hold its ground above $62,000 show that the market is losing steam.
With this being said, short-term corrections may be looming if this trend continues.
This outlook has caused a divide of sorts, between analysts.
While some have pointed out a possible rally, others believe a crash is incoming.
While historical data points to October being one of Bitcoin’s stronger months, trader Rekt Capital warns that Bitcoin could be getting set for a short-term dip.
On the other hand analyst Mags remains bullish on Bitcoin’s longer-term price.
The analyst noted that Bitcoin has closed another three-month candle above its 2021 all-time highs.
This indicates that the cryptocurrency could soar after all.
The third quarter of the year was incredibly slow for Bitcoin according to Coinglass.
Bitcoin quarterly returns
Even after this, Bitcoin remains the best-performing asset in 2024 according to the New York Digital Investment Group (NYDIG).
As of writing, the cryptocurrency has a year-to-date gain of 49.2% despite its sluggishness.
YTD gains of asset classes
This means that it is currently outperforming many other asset classes, albeit through a narrowed lead.
The head of research for NYDIG Greg Cipolaro noted that Bitcoin made a modest 2.5% gain in Q3.
This means that it bounced back from Q2’s losses. However, it was still weighed down by major sales. These included nearly $13.5 billion in distributions from the Mt. Gox and Genesis creditors.
Despite these hindrances, Bitcoin still managed a 10% rise in September which is traditionally a weak month for the asset.
Bitcoin’s resilience despite these hurdles could also be because of its growing institutional demand.
The US spot ETFs contributed over $4.3 billion in inflows during Q3.
Additionally, other major institutional investors like MicroStrategy and Marathon Digital have also continued to increase their holdings.
All of these combined have solidified Bitcoin’s place in corporate treasuries.
Looking ahead, Cipolaro believes that Bitcoin could see significant gains in Q4.
From a historical standpoint, this phase of the year is usually strong for Bitcoin with this year likely to be no exception.
Some of the major bullish catalysts include the global monetary easing policies, the upcoming U.S. election and what many believe to be a favorable environment for crypto under a Trump presidency.
Despite the uncertainty, Cipolaro also assured investors that Bitcoin is currently where it was in previous market cycles.
In conclusion, we might see some short-term corrections. However, the long-term prospects of the cryptocurrency remain as sharp as ever.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.