2021 is a year to remember for many reasons and in less than 24 hours the third quarter will be over to welcome the final quarter of the year. After Bitcoin hit its ATH in the second quarter, many in the community are expecting another bull run that will push BTC past its previous high of over $ 64,000.
While several key on-chain indicators point to such a shift, Bitcoin’s potential performance over the next 3 months needs to be assessed based on history, investor sentiment, and the overall market structure for altcoins.
Bitcoin has done well in the 4th quarters of the past few years
Bitcoin Quarterly Earnings | Source: Skew
Bitcoin’s historical fourth quarter performance could please the bulls. Since the beginning of 2014, the two largest price increases have been achieved in Q4 / 2017 and Q4 / 2020 with an increase of 210% and 168% respectively. On average, the fourth quarter since 2014 has also developed better than the rest of the quarter.
Another important news from an investor’s perspective is that short-term owners currently hold 20% of the offering. Similar scenarios were last observed in December 2018 and March 2020 – both times there were significant lows for Bitcoin.
With more than 80% of supply currently illiquid, long-term selling pressure is negligible unless the market falls abnormally.
Depression of excitement?
BTC flow to the exchange (pink) | Source: Santiment
While short-term owners may show signs of easing selling pressure, higher foreign exchange inflows over the past week suggest that bullish sentiment is easing somewhat. According to Santiment, BTC inflows have been higher than usual on average over the past week, which shows profit-taking in the markets.
Here, the history of the altcoin season is equally important.
During both the 2017 and 2020 rallies, altcoin dominance was low, while bitcoin accounted for over 65%. Currently, the BTC dominance is only around 42%. In essence, it means that altcoins are currently higher in market capitalization than the largest digital asset in the world.
In order to generate bullish momentum for Bitcoin, its dominance rate must increase by 50% before a rally to a new ATH is forecast on the chart.
Can the price reach $ 100,000?
Source: trade view
Based on current prices, a 55% increase in the fourth quarter of 2021 would allow Bitcoin to hit an all-time high of ~ $ 64,000. Such an investment return for Bitcoin is not uncommon during a bull run, but hitting the $ 100,000 mark seems unlikely as a ~ 138% jump is required.
If so, it would be BTC’s third largest quarterly gain since 2014. This would mean BTC will rise more than 100% in 3 of the last 6 quarters. No matter how high the upside potential is, such a market structure is unknown.
As a result, Q4 looks very interesting. Will history repeat itself with Bitcoin or will the price write a new chapter?
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According to AMBCrypto