After an early October that saw its price rise from $ 43,000 to near $ 58,000, an increase of around +45%, Bitcoin just stopped short of rejecting the last major resistance level before a new all-time high (ATH).
Make no mistake, though: what lies ahead for Bitcoin in the coming weeks looks phenomenal.
The 10 reasons I laid out in July 2021 why the price of Bitcoin will move towards $100,000 in the coming months , are still very valid for me. For these reasons, I now see much more specific elements that allow me to imagine that Q4 2021 will be phenomenal.
I highlight these items below.
Bitcoin entered Uptober
September is usually a red month for Bitcoin . This was confirmed again this year with a lot of uncertainty and -7% as of September 2020.
However, we could see a falling wedge forming in late September, leading to an upside exit on October 1, 2021:
In a few hours everything changed. Feelings shifted from extreme fear to neutrality and the onset of greed. The price of Bitcoin had entered Uptober .
The most incredible period of any Bitcoin bull market is usually Q4. Good thing we're here!
Bitcoin seems to be separating from the stock market
The relationship of the Bitcoin price to the US stock market has always been a topic of debate in the Bitcoin world. For some, there is no connection if you step back and take a long-term view.
For others, a decoupling must occur for Bitcoin to truly live up to its reputation as the ultimate hedge against uncertainty.
Since the beginning of October 2021, we can see a separation of the Bitcoin price from the S&P 500 and the Dow Jones:
While Bitcoin took +21% during the period, the Dow Jones and S&P 500 were relatively flat with moderate declines of -1% and -2% respectively.
We'll have to see this through the rest of the fourth quarter of 2021, and even more into 2022. Indeed, a stock market crash looks like a growing possibility. We will have to see if Bitcoin can play a hedging role by completely delinking itself from the US stock market in the event of such a crash.
The number of addresses with at least 1 BTC is increasing from July 2021.
By the end of February 2021, the number of Bitcoin network addresses with at least 1 BTC ownership reached an ATH of 830K. From that peak, there was then a decline to a low of around 800,000 addresses in July 2021:
Since then, there has clearly been a build-up phase for everyone who has a long-term view with Bitcoin. The number of addresses with at least 1 BTC recently reached 813K and it is a safe bet that the ATH of 830K addresses will be beaten in Q4 2021.
Miners' BTC reserves stabilize at an interesting level
It's always interesting to watch what Bitcoin miners do with their BTC. Whether they hoard or sell their bitcoins is an indicator of sentiment for the coming weeks and months.
We currently see miners' Bitcoin stabilizing at interesting levels and growing since July 2021:
We are still far from the levels reached at the end of 2020, but we clearly feel that miners are optimistic about Q4 2021. Another sign that does not disappoint.
Volumes are increasing again from early October 2021.
Since the beginning of October 2021, the volumes traded on the Bitcoin Blockchain have increased again. This is despite the price of Bitcoin approaching $60,000 in recent days:
Volumes have exceeded $200 billion per day regularly since early October 2021. We are clearly in a different phase than in the first half of 2021.
Institutional search is back
The rapid rise in the price of Bitcoin from $ 50K to $ 58K over the past few days can be credited to institutional investors making their return to the market in force.
More than 99% of transaction volume is from transactions over $ 100K:
As soon as Bitcoin price passes the April 2021 ATH of $64.8K, we should see returns for retail investors looking to take advantage of rising Bitcoin. Going up to $ 100K will then probably only be a matter of time.
Funding rates look bullish
In the derivatives market, we see traders also have a bullish bias since early October 2021. Although funding rates are approaching May 2021 levels, they are still far from the overheating levels reached between February and April 2021 Mr.:
Long positions are still not excessive and the market still has a lot to look forward to in the fourth quarter of 2021. The current pullback from $ 57.5K to $ 54.5K- $ 55K is even an excellent thing for Bitcoin to offer us a phenomenal Bull Run in next weeks.
Emergence of Bitcoin ETF by the end of October 2021
Investors have been waiting months, if not years, for Bitcoin ETF approval on Wall Street. After many rejections and delays, no fewer than 6 ETFs are in the process of being approved for the US market:
If just one of these ETFs is approved, it will push the price of Bitcoin even higher and the $100,000 mark will practically be reached by the end of 2021.
The verdict is expected in the coming days.
Watch out, though, as some Wall Street analysts are starting to bet on a further delay to the decision until 2022, until the regulatory environment becomes clearer. Either way, we'll find out in no time.
Bitcoin Lightning's network capabilities are increasing parabolically
The Lightning Network is a layer 2 solution built on top of the Bitcoin blockchain to enable the use of Bitcoin as an everyday payment method.
With the Lightning Network, Bitcoin scalability is no longer an issue and transaction costs are minimized. This makes it the future of Bitcoin as an everyday payment method.
El Salvador uses the Lightning Network to enable its population to use Bitcoin on a daily basis at a lower cost.
The good news is that Lightning Network adoption has accelerated dramatically in 2021, with Lightning Network capacity increasing at parabolic rates over the past few months. Over 3,000 BTC are now locked in the Lightning Network:
This is extremely bullish for the future of Bitcoin. Something that will push investors a bit more into Bitcoin in the coming weeks and months.
The Taproot upgrade will go live in November 2021.
Who said bitcoin never evolves? It is likely that naysayers or Altcoiners seek to denigrate the system invented by Satoshi Nakamoto. Bitcoin is developing at its own pace, regardless of criticism from the outside world.
Hundreds of billions of dollars are at stake and millions of people's hopes for a better world through Bitcoin are at stake. Any evolution of Bitcoin must be properly evaluated and tested so that there are no mistakes that could undermine its revolution.
After 4 years without much evolution of the Bitcoin source code, the Taproot update will go live in November 2021. This is a perfect signal from the Bitcoin community at the best time.
The Bitcoin system will be able to offer support for smart contracts, but also better privacy.
Bitcoin price is entering the same positive feedback loop as it was in the fourth quarter of 2020.
At the very beginning of November 2020, I wrote that bitcoin has entered a positive feedback loop that will drive its price to $100,000 by the end of 2021 Mr.
We're not there yet, but this positive feedback loop is now setting up again to give us a phenomenal Q4 2021:
The price of Bitcoin is rising and so is its volatility. This attracts media attention, leading to greater demand from various players: institutional, retail and large companies.
This mechanism is slowly taking hold and will cause the price of Bitcoin to explode in the coming weeks.
As I write this, Bitcoin price is in the $ 54.5K-$ 55K zone after a very welcome pullback from the $ 58K resistance. This pullback will allow the market to catch its breath and prepare for the next step.
First, the breakout of the last major resistance zone between $ 58K and $ 60K:
After that, a new ATH will only be a matter of days. Once this new ATH is reached, Bitcoin will once again enter price discovery mode, with all the phenomenal things this implies for Q4 2021.