Macro crypto currency market outlook

Bitcoin remains confined to a well-defined uptrend, with setbacks exceptionally well supported into dips. The most recent round of meaningful weakness has bottomed out at $49,050 and a higher low is now sought out ahead of an eventual push to a fresh record high. Above the $73,840 record high from March would open the next measured move upside extension targeting $95,000. Only a weekly close back below $49,050 would delay the bullish structure.

The market was nervous heading into September knowing it was the worst month of performance for bitcoin on an average return basis. But much to the market’s surprise and relief, September 2024 bucked the trend, with bitcoin putting in an impressive performance of +7%. The positive monthly performance for bitcoin extended to the rest of the crypto market as well. Ethereum gains were less impressive but closed out the month +2.5%.

As far as seasonal trends go, the market will be hoping we get back to seeing performance tracking more consistently with historical performance in Q4. Historically, Q4 is far and away the strongest quarter for bitcoin and crypto assets by extension. Looking at Q4 bitcoin performance from 2013 to present, the market has produced incredible average returns of +80%.

If we look at October performance, bitcoin has produced average returns of +20% from 2013 to present. On a positive note October is the second best month on average return basis, second only to November, which has produced average monthly returns of 47%. December bitcoin performance is less impressive than October and November, but impressive nonetheless, producing average bitcoin returns of 5.5% from 2013 to present.

Fundamentally, it has been an exceptionally positive year for crypto assets highlighted by the launch of the Bitcoin and Ethereum spot ETFs in the United States. This has paved the way for wider mainstream adoption, which we expect will continue to drive prices higher over the medium and longer-term.

Crypto assets have also been helped along by developments in the traditional markets, particularly with respect to Fed policy. The Fed commitment to more aggressive accommodation has invited a fresh wave of enthusiasm and appetite for global risk assets, while at the same time making bitcoin that much more attractive in a world where inflation could be at risk of turning back up as the Fed slashes rates.

All things considered, the outlook remains bright and we believe the pieces are in place for bitcoin to look to be pushing fresh record highs and Ethereum to start its journey back to its own record high in Q4 of 2024.