With Bitcoin surpassing the $80,000 level, assessments suggesting a potential bottom for BTC have increased. While October and November are often cited as possible bottoming points, CryptoQuant has released a new bottom analysis.
Bitcoin Could Bottom Out in October!
As the US midterm elections approach, signs are strengthening that Bitcoin may bottom out in October. CryptoQuant analyst XWIN Japan states in his latest analysis that there are signals indicating a potential bottom for Bitcoin.
This expectation is explained by the fact that, despite signs of demand recovery, BTC reserves on exchanges remain at low levels, and the amount of Bitcoin held by whales has reached approximately 3 million BTC.
However, according to the analyst, even though market conditions are beginning to recover, a sustained uptrend requires regular capital inflows into spot Bitcoin ETFs and a strengthening of buying activity in the US spot market to be confirmed.
On-Chain Data Giving a Bottoming Signal!
The analyst also considers the improvement in macroeconomic conditions among the possible signals of a bottoming out. At this point, market expectations regarding the probability of a Fed interest rate hike in October have fallen to approximately 18%, and Brent oil prices have dropped from levels close to $110 per barrel to around $103.
In addition, the analyst cited changes in three on-chain indicators as bottoming signals. According to the analyst, the first indicator shows that Bitcoin holdings on exchanges have recently recovered but remain at a low level. Second, ‘Apparent Demand,’ which indicates new demand for Bitcoin, has also rapidly recovered from a significantly negative level. Third, the amount of Bitcoin held by whales has also increased. It was stated that the Bitcoin holdings of large investors have reached approximately 3 million BTC and maintained a high level even during the recent price correction.
According to the analyst, these indicators suggest that conditions are improving for a bottom formation in Bitcoin. However, a definitive bottom confirmation requires sustained ETF inflows, strengthening buying in the US spot market, and continued demand recovery.
There’s a Possibility of Correction!
The analyst noted that while October historically stands out for its bullish expectations, a potential rise in October doesn’t necessarily have to be uninterrupted.
The analyst says that current data suggests a correction could pave the way for a new uptrend. However, confirmation of strengthening market demand is needed to say that Bitcoin has formed a permanent bottom.
“…The October rally doesn’t necessarily mean uninterrupted gains. A correction could lay the groundwork for the next rally.”
*This is not investment advice.
Continue Reading: The Big Question in Bitcoin: Could BTC Bottom Out in October? CryptoQuant Analyst Answers! Here Are the Details