The largest crypto asset, Bitcoin (BTC), is set to continue its September uptrend by posting a major rally in the fourth quarter of the year. Bitcoin reversed its downward momentum after weeks of price turbulence to breach the $60,000 mark once again, building excitement for what is to come in Q4.
Bullish Potential for Bitcoin in Q4
Historically, there has been a strong correlation between the overall momentum of the market in September and BTC’s performance in the fourth quarter of the year. When Bitcoin closed September in the green, it frequently ended the year on a positive note, according to analyst Eric Crown.
According to his analysis, the cryptocurrency’s fourth quarter returns have averaged 170%. Due to its dominance and its ability to generate significant profits, BTC’s performance is of utmost importance to traders and investors.
Bitcoin has experienced major activity over the past few weeks, especially after the US Federal Reserve announced another rate cut. This change in monetary policy caused BTC’s price to soar, reaching a high of $66,508 on Friday.
However, the market lost steam during the weekend, and the coin experienced a minor price decline. It retraced some of its gains by Sunday, entering red territory.
Notably, BTC’s price increased by more than 8% in September. Hence, the crypto asset could end the month on a high, paving the way for another successful fourth quarter, provided there are no significant sell-offs by holders.
Correlation with Traditional Assets
Meanwhile, Bitcoin’s key correlation with traditional assets like gold and stocks is a significant feature of the current market environment. Multiple indicators showed that the market momentum for Bitcoin has returned to neutral, according to Glassnode’s on-chain analyst James Check.
Considered by many analysts as the “digital gold,” Bitcoin continues to draw more institutional capital as traditional markets continue to fluctuate.
US Presidential Elections and Bitcoin
Notably, crypto experts believe that the outcome of the US presidential election will have an impact on BTC’s performance. ZX Squared Capital’s chief investment officer, CK Zheng, noted that political and economic unpredictability tends to favor Bitcoin.
He stated that neither of the major American political parties has done enough to address the country’s growing debt and deficits, which could be advantageous for Bitcoin as the election draws near.
During uncertain political times, like in the run-up to this year’s US elections, the leading virtual asset has shown strong performance. For example, during the 2020 presidential election and the halving event earlier in the year, Bitcoin experienced a 168% surge in value during the fourth quarter of that year.
Additionally, data from CoinGlass showed that there have been several instances of fourth-quarter rallies in Bitcoin that have exceeded 50% since 2013, with gains typically amplified by halving events. Hence, Zheng predicts that BTC will hit a new all-time high in the last quarter of 2024 or soon after the election.
Furthermore, the recent 50 bps interest rate reduction by the Federal Reserve could help the leading digital asset to maintain its upward trajectory. Riskier assets like Bitcoin could see substantial price growth if the central bank is successful in orchestrating a “soft landing” for the economy, averting a severe recession and out-of-control inflation.
With the gradual reintroduction of liquidity into the market, the coin could benefit from a positive economic environment.
Bitcoin and the Broader Crypto Market
While it influences the broader cryptocurrency market, Bitcoin’s price movements also affect other financial markets. Founder of Web3 PR firm YAP, Samantha Yap, highlighted how the industry is frequently impacted by the spike in retail interest that coincides with BTC rallies.
With developers and business owners striving to satisfy the demand for new goods and services, this spike in interest could result in a considerable amount of innovation within the sector. Moreover, this crypto’s function as a safeguard against macroeconomic volatility is gaining prominence.
More institutional investors consider this digital asset as a good store of value as long as traditional markets remain volatile. Furthermore, the creator of Cysic, a platform for creating and verifying zero-knowledge proofs, Leo Fan, has predicted that the narrative that Bitcoin is “digital gold” will only get stronger in the months to come.
