Will Bitcoin repeat history? On-chain data suggests Q4 breakout: CryptoQuant

Historical data shows that Bitcoin (BTC) has performed well in the fourth quarter of past bull cycles, especially during the halving. Current on-chain data shows that the leading cryptocurrencies are following previous patterns and are once again on track for a noteworthy fourth quarter.

A report from market analysis platform CryptoQuant reveals that Bitcoin price gains in the coming weeks are likely to persist as demand for Bitcoin recovers and is growing at its fastest monthly pace since April. Ta.

Bitcoin's seasonal performance is strong

Bitcoin's seasonal performance during the 2012, 2016, and 2020 halvings saw Bitcoin increase by 9%, 59%, and 171% in the fourth quarter, respectively. Analysts at CryptoQuant found that BTC is behaving very similarly to the pattern seen in 2016 and 2020.

This strong performance is driven by an apparent surge in demand for BTC, which last week saw the largest monthly increase of 177,000 BTC since April. Apparent demand refers to the difference between BTC production (mining issuance) and the change in its inventory (supply has been suspended for over a year). This indicator reached 496,000 BTC in early April, shortly after BTC rose above $72,000 in March.

The spike in this indicator preceded a more than 5% increase in BTC price. The cryptocurrency hit a 10-week high of $68,100 earlier this week and was trading at $67,900 at the time of writing.

Demand is growing

Furthermore, the rise in BTC demand is also seen in increased purchases of spot Bitcoin exchange traded funds (ETFs) in the US. These products recently netted around 8,000 BTC, the highest daily purchase amount since July 21st.

Large Bitcoin investors (whales) are also expanding their holdings, with their balances increasing by 670,000 BTC per year. Additionally, the increase in Whale holdings is above the 365-day moving average, which is considered a positive sign for the price.

CryptoQuant says that for BTC to sustainably rise to record highs, apparent demand for Bitcoin needs to grow. Historical data shows how positivity and increased apparent demand led to an increase in BTC prices from 2020 to 2021 and earlier this year. Apparent demand in those cases peaked at 490,000-550,000 BTC. However, the current demand is 177,000 BTC. Therefore, there is more room for growth.