Bitcoin has been hovering on the edge of a bear market for the past three weeks.
To maintain price stability during bullish phases, demand for Bitcoin must rise.
Historically, Bitcoin’s (BTC) performance has shown improvement in the fourth quarter following a halving event during bull cycle years. Despite CryptoQuant’s prediction that 2024 would follow a similar trend, the actual figures are falling short of expectations.
In the halving years of 2012, 2016, and 2020, Bitcoin’s seasonal returns were 9%, 59%, and 171%, respectively. Given Bitcoin’s current performance mirroring those of 2016 and 2020, the price is expected to increase in the coming months.
Sluggish Demand Growth:
As 2024 progresses, Bitcoin finds itself in an uncertain state, caught between a bull and a bear market as the fourth quarter begins. Unlike 2020, where Bitcoin was clearly in a bull market at this stage, this year’s conditions have been less definitive. According to the CryptoQuant Bull-Bear Market Cycle Indicator, Bitcoin has been teetering on the edge of a bear market for the last three weeks.
Demand growth for Bitcoin remains slow, and stronger growth is needed to drive and sustain price increases in Q4, according to a CryptoQuant report. To stabilize Bitcoin’s price during the bullish phase, a rise in demand is necessary. Analysts expect demand to recover, based on historical trends, which could also lead to an increase in short-term supply.
In 2024, supply levels spiked with the introduction of spot Bitcoin ETFs, indicating strong demand as long-term holders sold to new buyers. Since July, Bitcoin’s demand growth has been relatively muted, with monthly changes ranging from -23,000 to +69,000 BTC. In comparison, in April, when the asset was trading at $70,000, demand increased by 496,000 BTC, indicating ample room for potential growth in Q4.
