- Global liquidity in stablecoins could push crypto prices higher.
- Key indicators say Bitcoin is poised for a breakout.
September is often a bearish month for Bitcoin and other asset classes. However, October typically marks a strong bullish period, with Bitcoin [BTC] with positive returns in 8 of the last 9 October.
On average, the BTC price rises by 22.9% this month. This historical trend could explain why there is consistent buying in the options market.
Although global liquidity in the crypto market is increasing, it has not yet been fully allocated. Much of this capital is currently tied up in stablecoins, waiting for the impact of the BTC price.
When this ‘firepower’ eventually reaches the market, it could lead to an important step.
Source: CryptoQuant
Bitcoin is in consolidation
Bitcoin has been trading within a very narrow range over the past month. This compression usually precedes a large movement in either direction.
If Bitcoin experiences another solid decline, it could complete its current cycle and rebound strongly. The weekly time frame is showing some weakness, which is not ideal if the BTC price is expected to reach new highs in October.
However, it is not too late for this to happen. The key is that Bitcoin can break out of the current consolidation without looking back.
Source: TradingView
Once the capital currently held in stablecoins is allocated to Bitcoin, the price could break through either side of this range, potentially leading to a continuation of the ongoing bull run.
Bitcoin still has room to grow
The MVRV Z-Score, which is currently around 1.8, suggests that the market is moderately optimistic, but not to an extreme point.
This score indicates that while Bitcoin still has room to grow, caution is warranted as the market could become overvalued if the score continues to rise.
The 1.8 value implies that the cycle is far from over and may be just beginning. As the BTC price rises, it is important to keep a close eye on this score as it can provide early warnings of a market spike.
Source: Bitcoin Magazine PRO
The open interest in the short to medium term
In the short to medium term, open interest (OI) is relatively high, which could hinder a sustainable upward movement. For a healthier market, OI should fall by about 10%.
Recently, OI reset after a short-term surge during the last decline, returning the BTC price to where it started.
This reset is a positive sign as it reduces the chance of a major market decline and increases the chance of trading continuing on shorter timescales. If market conditions improve, the price of Bitcoin could rise.
Source: CryptoQuant
HODL cycles and periodicity
The Redistributed Revenue Ratio, which compares long-term holder activity to Proof of Work incentives, shows a clear pattern of HODL cycles.
The ratio adjusted with the Spent Output Profit Ratio (SOPR) is around 1.5, which indicates that Bitcoin has not yet reached its peak.
Source: The Bitcoin Lab
Read Bitcoin’s [BTC] Price forecast 2024–2025
As global liquidity continues to grow and once stablecoins are allocated to Bitcoin, the price could rise significantly.
Bitcoin will likely be one of the main beneficiaries when this capital finally hits the market, potentially pushing the BTC price higher.