For the first time in eight years, the leading cryptocurrency closed September higher. That result bodes well for bullish sentiment in October, according to analysts at Bitfinex.
According to observations, 9 of the 13 previous September month-end closes were negative.
According to experts, the continuation of upside momentum is indicated by the state of the crypto derivatives market. In particular, options with high likelihood imply a spike in price volatility — implied volatility (36.4%) has exceeded the historical level (27.1%).
“All of this points to the potential for some growth, at least on a longer time horizon,” the experts noted.
According to the analysts, on-chain indicators are not at odds with the conclusions. Coins held over the last 6–12 months are “stable,” while the supply of coins aged more than three years has remained largely inactive since February 2023, the experts explained.
“Metrics show that hodlers are determined to hold in the current price range,” the report says.
Bloomberg senior analyst Mike McGlone questioned the readiness of digital assets to stay on a growth trajectory given weakness in the equity market.
“Cryptocurrencies may be inclined to resume price declines. The biggest risk for them would be a drawdown in stocks typical of a recession. […] Liquidity continues to decline, which affects prices. Having come of age in a world of zero interest rates, the crypto hangover could be prolonged as global rates continue to rise,” the expert emphasised.
Declining Bitcoin Has Preceded #Fed Pivots —
The bottom line for #Bitcoin at the start of 4Q may be that liquidity remains negative, with price implications. Coming of age in a zero interest-rate world, the #crypto hangover could be enduring as global rates continue to rise,… pic.twitter.com/Nrn8lMaYzo— Mike McGlone (@mikemcglone11) October 3, 2023
According to McGlone, weakness in the third quarter may be indicative of an upcoming slowdown in economies. Meanwhile, central banks have not abandoned tightening of monetary policy.
Drawing historical parallels, the specialist mentioned Bitcoin’s drop before reversals of the ФРС, implying that cryptocurrencies may serve as leading indicators for broader market liquidity.
In September, Bitfinex analysts recorded signs of a renewed bullish trend in the crypto market.
Earlier, experts from QCP Capital put forward four arguments in favour of a forecast that Bitcoin would return to $25,000.