Bitcoin is currently at a pivotal moment as investors watch to see if historical trends will play out once again.
Nearly six months have passed since the fourth Bitcoin halving, and Hashdex Research revealed that BTC is now approaching a critical phase where, based on previous cycles, prices could begin rising after a lengthy consolidation period.
Will Historical Cycles Repeat?
There are key factors influencing this potential market shift. According to a report by the research team of asset manager Hashdex, this includes recent rate cuts by major central banks, such as the Federal Reserve's 50 basis point reduction in mid-September, monetary easing and stimulus measures in China, and the upcoming US presidential election.
These factors could create a favorable environment for a potential surge, similar to previous halving cycles where prices rose significantly in the months following the event.
At the end of the third quarter, the volatility in the crypto market was relatively stable, with bitcoin below 50% volatility and both Ethereum and Solana approaching similar levels. These lower fluctuation rates indicate a maturation of the industry, with only a temporary spike in early August caused by the unwinding of the Yen carry trade, which impacted all major asset classes across the world.
As the fourth quarter of 2024 begins, it is reasonable to anticipate an increase in overall crypto volatility, especially if positive price movements begin to emerge.
Hashdex Research noted that bitcoin investors have continued accumulating the asset, which fluctuated between $54,000 and $69,000 during the third quarter. By the end of it, BTC saw its dominance strengthen as it accounted for 54% of the digital asset market.
Bitcoin's Recovery So Far
Bitcoin began Q3 2024 on a positive note, gaining 5.3% in July due to increasing optimism surrounding the potential approval of Ethereum ETFs and renewed confidence in Donald Trump's electoral prospects.
However, this upward momentum took a hit in August when an unexpected rate hike by the Bank of Japan led to a broader sell-off across major asset classes. This ultimately resulted in a 10% decline for BTC.
September, too, started on a bearish note, as market sentiment weakened due to diminishing confidence in Trump's chances and concerning US payroll data indicating a possible recession.
The landscape, however, shifted in mid-September, sparking renewed optimism among investors, and aiding bitcoin's recovery. The crypto managed to conclude the month up by 8%, resulting in a cumulative total return of 2.5% for the third quarter.
Over the past seven days, BTC has appreciated by over 5% and is currently trading above $65,650.