• CROX ROAD
  • Posts
  • The Historical Case for a Bitcoin Bull Run in Q4: What Investors Need to Know

The Historical Case for a Bitcoin Bull Run in Q4: What Investors Need to Know

Discover why Q4 has historically been a strong period for Bitcoin, with insights into potential bull runs, key resistance levels, and risks for investors in 2024. Explore expert analysis and historical data to prepare for the upcoming quarter.

As Bitcoin continues to evolve, investors are always searching for the next major price rally. One of the most promising periods for a potential bull run historically has been the fourth quarter (Q4) of the year. In this article, we’ll explore the historical trends that suggest a Bitcoin bull run may occur in Q4 2024, analyze the factors that could drive such a rally, and discuss the risks that could derail it.

Table of Contents

1. Historical Performance of Bitcoin in Q4

Historically, Bitcoin has shown impressive performance in Q4, particularly in years where a halving event occurred. A Bitcoin halving, which happens approximately every four years, reduces the reward for mining new blocks by 50%, effectively reducing the supply of new Bitcoin entering the market. This supply shock has traditionally led to price increases in the months and years following the halving.

a. Positive Returns in Halving Years

In 2016, Bitcoin saw a Q4 gain of 58%, and in 2020, after the halving, the cryptocurrency surged by 168% in the same quarter. This trend has made Q4 a period to watch for potential bullish moves. Even outside of halving years, Bitcoin has managed to post positive returns in eight of the last 11 years between 2013 and 2023, with an average gain of 88%.

b. Supercycle Predictions for 2024

With 2024 marking another post-halving year, many analysts predict that Bitcoin could enter a supercycle—a sustained period of exponential growth. Analysts argue that the convergence of macroeconomic factors, such as inflation and the growing adoption of Bitcoin as a store of value, alongside reduced supply, could set the stage for another significant rally.

2. Current Market Sentiment and Resistance Points

Despite Bitcoin’s historical Q4 success, its current market situation presents both opportunities and challenges. As of now, Bitcoin has seen a 40% rise in 2024 but faces a significant hurdle in overcoming key resistance levels.

a. Technical Resistance: The 200-day EMA

One of the primary technical obstacles for Bitcoin is the 200-day Exponential Moving Average (EMA), currently positioned around $59,423. This level has acted as a strong resistance, preventing Bitcoin from pushing higher. Analysts point out that a breach of this EMA would signal the start of a new bullish phase. However, failure to break through could lead to downward pressure on Bitcoin’s price.

b. Liquidity and Market Dynamics

Bitcoin's recent price action shows consolidation below the 200-day EMA, and for it to break higher, substantial demand-side liquidity is required. In simple terms, there needs to be a large influx of buying pressure from both retail and institutional investors to push Bitcoin’s price above this resistance level.

3. Expert Insights: Will History Repeat Itself?

Veteran traders and analysts have weighed in on Bitcoin’s current cycle. Prominent trader Peter Brandt has highlighted that Bitcoin is experiencing its longest post-halving consolidation period in history, suggesting that a new all-time high might take longer to materialize. However, Brandt also notes that this extended consolidation could be setting the stage for a significant rally.

a. Accumulation Phase

CryptoQuant’s founder, Ki Young Ju, points to Bitcoin’s current accumulation phase, where investors are slowly accumulating the asset in anticipation of future gains. According to Ju, this accumulation pattern typically precedes a parabolic uptrend, especially in the final quarter of the year, as seen in previous halving cycles.

4. Potential Risks to Watch

While historical data and technical indicators show promise for a Q4 Bitcoin rally, investors should also be mindful of the risks that could undermine this potential.

a. Macroeconomic Factors

Global economic conditions, such as inflation, interest rate hikes, and geopolitical tensions, can play a significant role in Bitcoin’s performance. If these factors lead to a risk-off sentiment in financial markets, Bitcoin could face headwinds as investors move towards safer assets.

b. Regulatory Uncertainty

The regulatory environment surrounding cryptocurrencies remains a key risk. Governments around the world are still in the process of developing frameworks to regulate Bitcoin and other digital assets. Any negative regulatory developments, such as bans or stringent restrictions, could negatively impact the market and dampen the bullish sentiment for Bitcoin.

c. Volatility and Market Sentiment

Bitcoin’s inherent volatility is another risk factor. While the cryptocurrency has the potential for huge upside gains, it also faces the possibility of sharp corrections. Analyst Mark Cullen has warned that if Bitcoin fails to break through its current resistance levels, it could experience a drop to $57,500 or even as low as $54,500.

Conclusion

For investors, the historical case for a Bitcoin bull run in Q4 is compelling. Past performance shows that Q4 has been a period of strong gains for Bitcoin, especially in halving years like 2024. However, the market faces significant resistance and macroeconomic challenges that could temper the bullish outlook.

To navigate these uncertainties, investors should closely monitor key technical levels, such as the 200-day EMA, and stay informed about broader market conditions. While the potential for a parabolic rally exists, understanding the risks will be crucial for making informed investment decisions.

Ultimately, whether Bitcoin enters a new bull run in Q4 will depend on a combination of historical trends, market liquidity, and external factors. Investors should stay vigilant and be prepared for both the bullish and bearish scenarios that could unfold in the final quarter of 2024.

FAQs

Why is Q4 historically significant for Bitcoin? 

Historically, Bitcoin has posted strong gains in Q4, particularly in halving years, due to reduced supply and increased demand. The last two halving cycles saw Q4 gains of 58% and 168%.

What technical resistance is Bitcoin currently facing? 

Bitcoin is facing resistance at the 200-day Exponential Moving Average (EMA), which is around $59,423. A break above this level could signal a new bull run.

What is a Bitcoin halving, and why does it matter? 

A Bitcoin halving reduces the block reward for miners by 50%, cutting the supply of new Bitcoin. This supply shock has historically led to significant price increases in the months following the event.

That's all for today, see ya tomorrow! If you want more, be sure to follow our X (@croxroadnewsco), Instagram (@croxroadnews.co), Youtube (@croxroadnews), Tiktok (@croxroadnews) and nostr - [email protected]

VISIT OUR STORE

The Best Merch For Bitcoin Maxis

Visit Crox Road Store 👉🏻 https://croxroad.store/

FOLLOW US ON NOSTR

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.

You May Also Like

If You Like Our Content And Want To Help Us To Make It Better, You Can Buy Us One (Or More!) Coffee CLICKING HERE

Reply

or to participate.