Prolonged Bitcoin Fluctuation Predicted by CryptoQuant
In the world of cryptocurrency, the third quarter of 2024 is shaping up to be an interesting period. Analysts, traders, and market observers are predicting a generally bullish outlook for Bitcoin, but with some cautious signals from whale profit-taking, miner sell-offs, and options traders bracing for potential pullbacks.
Sean Dawson, head of research at Derive, has stated that options traders are preparing for a rough two months, targeting a 10-30% downside into September. This pullback, according to Dawson, is the third major wave of whale profit-taking since mid-2024, as reported by on-chain data firm CryptoQuant.
The crypto market has drifted lower following a record high of $123,300 on July 14, awaiting a fresh catalyst. However, the market standoff between profit-taking whales and long-term holders could last for several months, as some large holders (whales) are accumulating Bitcoin. For example, Kraken saw significant BTC outflows indicative of whale buying even as short-term holders sell.
Whale activity shows mixed signals. While some retail investors are taking profits, certain large holders are consolidating their Bitcoin holdings. This suggests profit-taking by some, but consolidation and accumulation by bigger players.
Options traders appear braced for pullbacks or consolidation phases by positioning themselves defensively, reflecting some market uncertainty amid macroeconomic and regulatory developments. This cautious stance by derivative traders supports a view that while a steady climb is likely, sharp corrections cannot be ruled out.
Price targets for Q3 2024 vary but are generally optimistic. Some forecasts project Bitcoin moving 20-25% higher over the quarter, potentially hitting new highs near $130,000 and $135,000. More ambitious longer-term predictions see Bitcoin touching $145,000 to $160,000 by year-end 2025 and beyond, driven by sustained institutional adoption and ETF inflows.
CryptoQuant's view of a breakout to a new all-time high is supported by historical trends. In addition, Charles Edwards, founder of Capriole Fund, believes Bitcoin is "undervalued" based on his Energy Value model. Edwards argues that Bitcoin is trading below its fundamental worth due to the energy used by its mining network.
The market seems to be preparing for a minimal median return in the third quarter, aligning with Bitcoin's historical performance. However, the fourth quarter historically delivers the strongest gains, with a median return of 52%.
It is important to note that in crypto markets, "whales" refer to large holders whose trades can significantly impact the price of an asset. The profit-taking in the crypto market is attributed to both old and new whales, according to Sean Dawson, head of research at Derive.
In conclusion, the consensus for Q3 2024 is a cautiously optimistic Bitcoin price environment characterized by steady upward momentum fueled by institutional demand and accumulation, but with possible short-term volatility due to profit-taking by whales, miner selling pressure, and cautious positioning by options traders. As always, investors are advised to conduct their own research and make informed decisions.
Sources:
- Decrypt
- CryptoQuant
- Derive
- Capriole Investments
- In the crypto market, large holders, often referred to as 'whales', are accumulating Bitcoin, as seen in Kraken's BTC outflows, suggesting continued interest despite short-term selling.
- Analysts at Derive predict a 10-30% potential pullback for Bitcoin in the upcoming two months, echoing the third wave of whale profit-taking since mid-2024, as reported by CryptoQuant.
- Crypto markets have faded lower since the record high of $123,300 in July, with market observers eagerly awaiting a fresh catalyst to spur growth, like institutional adoption or ETF inflows.
- Options traders are positioning themselves defensively, reflecting a sense of uncertainty in the market amid macroeconomic and regulatory developments, anticipating potential pullbacks or consolidation phases.
- Charles Edwards, founder of Capriole Fund, believes that Bitcoin's mining energy consumption does not accurately reflect its fundamental worth, categorizing it as 'undervalued' based on his Energy Value model.
