The crypto market is poised for a liquidity influx in the year’s fourth quarter, potentially setting the stage for a significant parabolic rally in both Bitcoin (BTC) and various altcoins. This surge of investment could elevate prices as traders aim to harness the expected momentum.
Today, Bitcoin’s value surpassed $65,000, marking a notable accomplishment. However, a recent analysis suggests this increase is merely the onset of a potentially extensive price upturn. The expected rise is likely driven by the resurgence of retail investors and a substantial capital influx from the Chinese market.
More Capital Means More Potential for Bitcoin and Altcoins
Bitcoin’s recent price increase could be linked to the 50 basis point interest rate cut by the Fed earlier this month. Nonetheless, the leading cryptocurrency is not the sole beneficiary of this decision.
Following the rate reduction, altcoins, which faced a prolonged downturn over the prior two quarters, have now seen significant price rallies. Yet, 10x Research, headed by analyst Markus Thielen, asserts that these recent gains pale in comparison to what lies ahead in Q4.
“Altcoins are on the rise. Further gains seem probable as stablecoin issuance accelerates, and Chinese OTC brokers report substantial inflows. With Bitcoin surpassing $65,000, we expect a swift movement towards $70,000, followed by new all-time highs shortly thereafter,” Thielen stated in the report dated September 26.
Although Bitcoin’s market share has decreased, the overall market capitalization of altcoins has risen by 15% since September 17.
However, the recent drop in BTC’s dominance does not necessarily indicate a continued decline in its price. In 10x Research’s report, Thielen noted that Bitcoin might benefit from a new capital injection of $278 billion from the Chinese market in Q4.
“The $278 billion Chinese stimulus initiative could trigger a parabolic rise in cryptocurrency valuations, fueled by growing global liquidity,” the report indicated.
If this scenario unfolds, Bitcoin’s price could hit $70,000 before the end of October, often referred to as “Uptober.” Another intriguing aspect of this situation is the increasing engagement of retail investors.
Throughout much of this year, retail investors have mostly remained on the sidelines while institutional investors propelled BTC’s price to its all-time high (ATH). However, as of now, the landscape appears to be shifting with a rising ratio of retail to institutional addresses.
Read more: 10 Best Altcoin Exchanges In 2024
Retail Returns and Institutions Can Bet More
This increase benefits not only Bitcoin but also altcoins. For instance, prices of altcoins like Shiba Inu (SHIB) have surged by 41% in the past week, while SEI has jumped by 31%, along with a similar trend for Wormhole (W).
Interestingly, 10x Research is aligned with this observation, highlighting that the movement appears to be originating from South Korea. This development suggests that the Chinese $278 billion liquidity, combined with robust market engagement from the Asian region, could significantly influence the projected upward trend for the remaining months of the year.
“Retail crypto trading activity in South Korea reinforces this trend, with daily trading volumes now around $2 billion. Although this is still below the impressive $13 billion recorded in early March 2024 — a period when crypto volumes eclipsed the local stock market, and Shiba Inu alone accounted for nearly 40% of the stock market’s volume — altcoins have dominated trading in the past week, surpassing Bitcoin,” stated 10x Research.
Moreover, Bitcoin has shown a reduction in its 30-day realized volatility. This decrease signifies that institutional investors can expand their positions, potentially leading both BTC and the broader market to appreciate in value.
BTC Price Prediction: Clearly a Bullish Cycle
From a technical standpoint, Bitcoin has successfully broken out of its descending channel. This bearish pattern has constrained the coin from exceeding $65,000 since July.
Yet, with support established at $62,825, BTC managed to overcome this resistance. Based on the daily chart, Bitcoin’s price could confront resistance at $68,253, which stands as a major focal point. Surmounting this obstacle could be pivotal for a potential ascent towards $73,095.
Should this scenario materialize, BTC might achieve a new all-time high before the conclusion of Q4, with potential targets starting from $76,075.
Read more: How To Buy Bitcoin (BTC) and Everything You Need To Know
Nevertheless, a rejection at $68,253 could invalidate this forecast. Should that occur and if liquidity in the crypto market fails to improve, Bitcoin’s price may plummet to $58,188.
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