Bitcoin News – Bitcoin Price Forecast: Will Q4 2024 See a Major Breakout?
Bitcoin News – Bitcoin is currently trading 7% below its local high of $66,508, reached on September 27, 2024. Despite this dip, some analysts believe that the correction could be a healthy reset, positioning Bitcoin for significant gains in the last quarter of the year. As the cryptocurrency market heads into Q4, several key metrics suggest Bitcoin may be gearing up for a major move higher.
Analysts See a Healthy Reset in Bitcoin Valuation
According to Jamie Coutts, chief crypto analyst at Real Vision, Bitcoin is still near its all-time highs, yet crucial valuation metrics have declined from overbought levels. In an October 1 post on X (formerly Twitter), Coutts highlighted the importance of the Market Value to Realized Value (MVRV) Z-score. This on-chain metric compares Bitcoin’s market value to its realized value and has seen significant corrections across multiple timeframes. Specifically, the MVRV Z-score is -116% over the last three months, -94% over the last two years, and -107% over a four-year period. These figures suggest that Bitcoin is undervalued in various timeframes, indicating potential for future growth.
Open Interest Remains High, but Funding Rates Are Subdued
Coutts also noted that Bitcoin’s open interest (OI) remains elevated, a key indicator that reflects market sentiment and can help forecast price movements. According to the data, perpetual futures OI has surged 800% over the last four years. While high OI is generally a bullish indicator, Coutts pointed out that funding rates remain subdued, which means that despite high OI, traders are not overly leveraged, reducing the risk of sudden liquidations.
Additionally, Coutts mentioned that global liquidity is accelerating to the upside, a trend that could support further gains. He emphasized that the pullback seen in Bitcoin’s price over the last six months has removed much of the excessive bullish sentiment, creating the conditions for a significant rally in the coming months.
Global Liquidity and Bitcoin: A Strong Correlation
Historically, Bitcoin’s price has shown a strong correlation with global liquidity. A report from independent analyst Lyn Alden highlights this relationship, revealing a 0.94 correlation between Bitcoin’s price and global liquidity between May 2013 and July 2024. This correlation suggests that increases in global liquidity could serve as a catalyst for a Bitcoin rally.
As central banks worldwide adjust their monetary policies, Bitcoin could benefit from expanding liquidity. Alden’s research indicates that when liquidity increases, Bitcoin’s price tends to follow suit, and if global liquidity continues to rise, Bitcoin might be primed for significant gains in Q4.
How High Could Bitcoin Go in Q4 2024?
As Bitcoin gears up for the last quarter of 2024, traders and analysts are speculating on its potential performance. Q4 2024 is shaping up to be a particularly important period, as it coincides with a Bitcoin halving event and the US presidential election—two major factors that could influence Bitcoin’s price trajectory.
While Bitcoin’s price typically performs well following a halving event, election years tend to introduce a different dynamic. According to Bitcoin analyst Timothy Peterson, Bitcoin’s performance during US election years tends to be weaker than in non-election years, largely due to market uncertainty. The unpredictable nature of election outcomes leads to heightened volatility and more cautious investor behavior, often resulting in either muted or negative returns for Bitcoin.
However, Peterson remains optimistic about Bitcoin’s potential for gains in November and December. He argues that as election outcomes become clearer, investors may feel more confident, leading to a late-year rally for Bitcoin.
September’s Strong Performance Fuels Optimism for Q4
According to CoinGlass, Bitcoin recorded its greenest September in history, closing the month with a 7.29% gain. This strong performance in what is typically a bearish month for Bitcoin has further fueled optimism among traders. With both the halving event and the US election approaching, many are now speculating that Bitcoin could outperform in Q4.
Bitcoin Positioned for Major Gains?
While Bitcoin is currently trading below its recent high, key metrics suggest that the cryptocurrency is far from being overvalued. The decline in valuation metrics, along with high open interest and subdued funding rates, indicate that the market may be setting the stage for a significant rally. Additionally, the strong historical correlation between Bitcoin and global liquidity suggests that a continued expansion of liquidity could lead to substantial gains for Bitcoin in Q4 2024.
As always, market conditions remain unpredictable, particularly with the upcoming US presidential election, but the signs point to a promising finish for Bitcoin in 2024. Investors should closely monitor global liquidity trends, election developments, and key on-chain metrics to gauge whether Bitcoin is indeed on the verge of another major breakout.
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