Bitcoin has surged by 26.2 percent since the September 6th low of $52756, in doing so breaching the $65,000 mark and exceeding the previous local top recorded on August 25th. This upward move marks Bitcoin’s first major break above a local top since March 2024. The timing aligns with the start of October, historically the month with the highest median price increase for Bitcoin, with a median return of 27.7 percent and an average return of 22.9 percent. These strong historical trends, along with the upcoming Q4, which also typically sees the highest average quarterly returns, have bolstered optimism for further gains.
However, while Bitcoin has reclaimed key on-chain levels such as the Short-Term Holder Realised Price (currently $62,750), there are warning signs. Spot market buying, which had been aggressive since the September 6th local bottom, has recently flattened, suggesting that the market may be reaching a temporary equilibrium.
Additionally, BTC open interest (OI) has surged, exceeding $35 billion, a level that has historically correlated with local price peaks. This raises concerns of potential market overheating, although a modest 5-10 percent pullback could reset OI without disrupting the overall uptrend. Bitcoin remains in a large consolidation range between $50,000 and $68,000, reminiscent of its halving year performance in 2020. If historical trends hold, Bitcoin could be poised for a new all-time high by the end of Q4 2024 or early 2025, supported by declining exchange reserves and reduced passive selling pressure.
The economic landscape in the US for August and early September reflects a mixed, yet cautiously optimistic outlook. Inflation has slowed, registering its smallest annual increase in over three and a half years, signalling growing economic stability. This is reinforced by robust economic growth, with the second quarter of 2024 seeing a three percent annualised rise in gross domestic product. However, consumer confidence – recorded before the Fed announced a cut in rates this month – took a sharp downturn in September, marking its most significant decline in three years, largely driven by concerns over the labour market.
Despite these anxieties, there is a surprising surge in households planning to purchase homes within the next six months, offering a potential sign of resilience in an increasingly hopeful economic environment.
The latest developments in the cryptocurrency industry highlight both progress and ongoing concerns. US businesses now have the ability to buy, hold, sell, and transfer cryptocurrencies, but scepticism lingers over the non-custodial nature of these models, with many in the crypto community feeling that platforms like PayPal, with their centralised approach, undermine the decentralisation that is core to the crypto ethos. Meanwhile, Vice President Kamala Harris has pledged to strengthen US leadership in emerging technologies, including blockchain and cryptocurrency, as part of her vision for an “opportunity economy” aimed at enhancing the nation’s global competitiveness in the digital era.
In the corporate space, Ethena is set to launch a new stablecoin, UStb, backed by BlackRock’s USD Institutional Digital Liquidity Fund in partnership with Securitize. This stablecoin offers a more stable alternative to their existing USDe stablecoin and can be used as margin collateral on exchanges, catering to a different risk profile. These advancements reflect a dynamic landscape where innovation continues to grow, even as debates over the principles of decentralisation persist.
Have a great trading week!
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