Bitcoin's liquidity has come back to the market, and traders are now in FOMO mode, according to Markus Thielen.
Santiment, however, believes that traders are overly optimistic, and could therefore see Bitcoin stall instead of rally.
Septembers are historically bearish for Bitcoin. However, the cryptocurrency is set to finish strong with a 9% price increase.
This puts massive hope on October, which is generally believed to be a bullish month.
The crypto market, for the first time in months, is starting to show consistent green.
Both seasoned traders and newcomers are on the edge of their seats at this point, with Bitcoin showing signs of an incoming rally.
This week, analysts from all over the market have pooled insights together.
In this article, we will discuss three of the biggest arguments for (or against) an incoming bull run.
We will also go over why analysts believe that Bitcoin could be ready for a breakout, and why market sentiment might be a hindrance (rather than an asset).
Here are three key insights from analysts, that could shape Bitcoin’s future.
The first Bitcoin insight is from Markus Thielen from 10X Research.
According to the analyst, Bitcoin is now riding a wave of optimism, which is fueled by FOMO.
Thielen in a recent insight post, noted that recent developments have contributed to this surge.
Some of these include the 410 billion surge in stablecoin minting and the US Federal Reserve rate cut in September.
Bitcoin after the FOMC meeting
Thielen says that this stablecoin surge has injected liquidity into the market, and has saved Bitcoin from its ongoing downtrend.
The FED’s decision to cut its interest rates as well as China’s fiscal stimulus plans have also helped the cryptocurrency to rebound strongly off the $60,000 sone and towards $65,000.
The analyst notes that Bitcoin's break above the $65,000 mark could be a major catalyst.
This breakout could lead it to a push towards $70,000 and then its previous all-time high.
Bitcoin will rally back to its ATH
The influx of stablecoins (USDC in particular) has also been a major factor, with USDC now accounting for around 40% of all the stablecoin inflows in recent weeks.
The surge in USDC compared to Tether’s USDT could also be a major indication that Defi is coming back to life.
Thielen also pointed out China’s ongoing fiscal stimulus measures.
As of writing, around 55% of Bitcoin’s mining activity is now concentrated in Chinese mining pools.
This means that the market is set to receive massive inflows.
Thielen also predicts that we might see a major rally in Q4 of this year, especially with FOMO playing a major role.
While the FOMO is currently good as Markus Thielen points out, it can also be a double-edged sword according to Santiment.
According to the data analytics platform in a recent tweet, Bitcoin's chances of hitting a new all-time high may not be as certain.
Santiment noted that social sentiment is currently skewed heavily towards bullishness.
This should be a good thing.
However, there are currently twice as many positive crypto posts as negative ones at the time of writing.
This could be bad, considering how the market tends to move in the opposite direction of crowd sentiment.
This is accurate, historically speaking, with Bitcoin tending to rally when the market expects it to crash and dumping when analysts dole out bullish posts en masse.
Santiment warned that this overly optimistic mood could have a negative effect, causing the market to stall.
The firm warned investors to be cautious because the expected price surge might not materialize until the sentiment cools off.
Bitcoin’s price performance
Interestingly, Santiment made this post on Sunday, 29 September. Bitcoin has had relatively stagnant price movement on the daily and weekly timeframes, according to CoinmarketCap.
As of writing, the Bitcoin fear and greed index is trading in the "greed" territory, despite trending at an “extreme fear” rating of 22 earlier in the month.
Finally, history, being the best analyst, has something to say.
September, historically speaking has consistently been Bitcoin’s worst month since 2013.
Coinglass data shows that Septembers more often than not, finish in the red.
However, this year has been the exception to this rule—as September draws to a close, Bitcoin is on the verge of finishing with a healthy 9% price increase.
Bitcoin’s historical performance
This change in trend makes October an even more attractive month, considering how this month is generally believed to be a bullish one.
Bitcoin has only been red in October twice since 2013, with some years even seeing as high as 60% gains (2013 for example).
Generally, October, November, and December turn out to be strong months for crypto, considering trends like the end-of-year "Santa Claus phenomenon".
Traders are now eyeing the $70,000 zone for Bitcoin at least, in October.
Overall, the outlook for Bitcoin in general is a mix of optimism and caution with the need to patiently navigate the market becoming even stronger.
The likely path for Bitcoin might be a rally in October, crazy volatility in November (before and after the elections), and then a "Santa Claus" rally in November and December.
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.