Coin World News Report:
As the fourth quarter approaches, Bitcoin struggles to stay above the bull market support level. Analysis of historical trends suggests that a rebound or further decline may occur in the fourth quarter of 2024.
Last week, the price of Bitcoin experienced a significant drop, falling to the level of $53,000 for the first time since February. This downward trend continued until the beginning of this week.
However, the cryptocurrency has slightly recovered and is currently trading above $55,000. Despite the rebound, Bitcoin still dropped by 2.4% in the past 24 hours, with a trading price of $55,704, hitting a 24-hour low of $54,320.
During this period, renowned cryptocurrency analyst Benjamin Cowen recently discussed the impact of Bitcoin’s current price trend and its potential trajectory by the end of the year on the social media platform X.
Cowen stated that Bitcoin’s recent performance may indicate a “summer calm,” which is a pattern observed in previous cycles. His analysis suggests that the future of cryptocurrency in the fourth quarter depends on its ability to recover and maintain key price levels in the coming weeks.
Potential performance of Bitcoin in the fourth quarter
Before delving into the predictions for the fourth quarter, it is crucial to understand what the Bull Market Support Band (BMSB) is.
This technical indicator combines the 20-week moving average and the 21-week exponential moving average and serves as a key support area in a bull market.
Sustained positions above this range are usually considered bullish, while positions below it may indicate bearishness.
Cowen pointed out that Bitcoin is currently testing this support band. If historical patterns hold true, Bitcoin’s behavior relative to the BMSB in the summer may lay the foundation for its performance in the fourth quarter.
For example, in 2023, Bitcoin experienced a significant surge in the fourth quarter after briefly falling below the BMSB. Similarly, in 2013 and 2016, there were substantial increases after periods below this range.
Cowen further explored the scenario of Bitcoin facing a similar decline in the summer. He noted that in years like 2019, when Bitcoin remained below the BMSB after the summer, the fourth quarter tends to be bearish.
On the contrary, years with a recovery above the BMSB often experienced strong rebounds in the fourth quarter.
Current market dynamics show that Bitcoin is struggling to climb above the BMSB. Cowen speculates that the outcome of this struggle may lead to a strong recovery similar to 2013 and 2016 or mimic the calmness of the fourth quarter of 2019.
This uncertainty makes the next few weeks crucial in setting the tone for the remaining time of this year.
Current market fundamentals
Regarding the fundamentals of Bitcoin, whale trading volume has significantly decreased, dropping from over 17,000 transactions within a week to below 12,000 transactions.
This decline may indicate a cooling interest from larger investors or a possible consolidation phase.
In addition, Bitcoin’s open interest rate has slightly decreased by 2%, currently standing at $27.62 billion. However, the trading volume of open interest has sharply increased by 32.91%, reaching $57 billion.
The increase in trading volume, despite the decrease in open interest contracts, suggests that although there are fewer open positions, significant trading activities are taking place.
Furthermore, the Market Value to Realized Value (MVRV) ratio of Bitcoin, which measures market profitability, is 1.816.
A ratio higher than 1 usually indicates profitability for ordinary holders, which may suggest that despite recent price drops, overall market sentiment remains positive.
As the fourth quarter approaches, the market is still at a critical moment.
Read Bitcoin’s [BTC] Price Predictions for 2024-2025
Whether Bitcoin can rebound above key technical levels may determine the direction of the market for the next few months, potentially laying the foundation for the next significant rebound or continued consolidation.
On the other hand, AMBCrypto recently reported that Bitcoin may have bottomed out as the increase in realized losses on-chain indicates another rebound for Bitcoin is imminent.