As we delve into Q4 2024, Bitcoin is experiencing a notable sell-off, edging closer to the significant psychological support level of $60,000. Historically, the fourth quarter has been bullish for Bitcoin, but the current market activity suggests a less promising start. Let’s explore the factors influencing Bitcoin’s performance and what the future might hold.
Understanding Bitcoin Miners’ Reduced Selling Activity
Despite Bitcoin facing downward pressure, with a nearly 10% decline from September highs, an intriguing trend is emerging: Bitcoin miners are reducing their coin liquidation. In recent weeks, top miners have been gradually lowering their transfers to major centralized exchanges such as Binance and Coinbase.
This strategic move by miners is significant, especially following the April 20 Halving event. Historically, miners increase their selling activities before and after Halving to adjust to the new inflation regime. The Halving event automatically reduces block rewards by 50%, necessitating miners to adapt to a halved revenue stream, unless transaction fees increase significantly.
Post-Halving expectations were high, with market traders anticipating a swift uptrend, especially after Bitcoin surged to nearly $74,000 in March. However, substantial BTC sales by “weak” miners dampened these expectations, leading to a price decline despite net inflows from spot Bitcoin ETF issuers in the United States.
Assessing the Potential for Bitcoin’s Recovery in Q4 2024
The reduced selling pressure from miners could potentially support Bitcoin prices. Their decision to slow down BTC liquidation indicates a belief in a price recovery in the upcoming months. For the uptrend to materialize, traders are closely monitoring fundamental factors and market conditions.
Historically, Q4, particularly October and November, has been a period of optimism for Bitcoin enthusiasts. However, the recent losses represent the worst start for Bitcoin in October in over a decade. This downward trend poses challenges for maintaining the historically bullish momentum.
In the short term, market analysts believe that the current sell-off could be mitigated if short-term holders (STHs) reduce their supply by 80,000 BTC. STHs, who typically purchased Bitcoin within the last 155 days, are viewed as speculators and can impact the uptrend due to their tendency to sell during volatile periods. If STHs decrease their supply, Bitcoin may find support at the crucial $60,000 level. Conversely, if bearish pressure persists, the price could fall below the $57,000 support line visible on the daily chart.
As we navigate the complexities of Bitcoin’s market dynamics in Q4 2024, it is essential to stay informed about miner activities, STH behavior, and broader market trends to make educated investment decisions.
