Bitcoin (BTC) Is About to Close Its Most Bullish September in Over a Decade

Even with today's correction that has pushed its price south by almost three grand, BTC is on the verge of closing its most bullish September

CryptoQuant analyzed the recent price surge of BTC, highlighting the increasing net inflows toward spot Bitcoin ETFs as a possible driving force.

According to CryptoQuant's analysis, the inflows into BTC-related exchange-traded funds (ETFs) played a role in the recent price rally. The monitoring platform noted that some investors in these ETFs have become Long-Term Holders as their supply passed the 155-day mark.

However, CryptoQuant also highlighted that this shift usually occurs during the late stages of a bull market, and it could be a worrying sign.

“Spot Bitcoin ETF holdings are transformed into Long-Term Holder Supply,” the platform noted. “Spot Bitcoin ETF supply is shifting to Long-Term Holder Supply as coins pass the 155-day mark. While this may seem bullish, such shifts often occur in the late stages of a bull market.”

The platform also highlighted the consequences of BTC's 20% surge from below $53,000 to $63,500, which put many investors back in profit.

The percentage had surged to over 90% when BTC's price hovered above $65,000. CryptoQuant focused more on Short-Term Holders, those holding BTC for 155 days or less, with their average purchases at a price of $63,000.

This level will now act as support, and BTC could tumble if the majority of them decide to sell off their stash with minor gains, the platform added.

“Short-Term Holder average BTC purchase price is now at 155 days (around $63,000) due to the recent price rally,” CryptoQuant stated. “This level is now crucial support. BTC price could quickly drop if they sell their stash with minor gains.”

Finally, CryptoQuant expressed concerns about the futures market, which seemed to be overheating with Open Interest growing to over $19 billion.

“The futures market is showing signs of overheating,” the platform noted. “Open Interest is around $19.1 billion. Since March 2024, it has crossed $18.0 billion six times, each time leading to a price drop. This is the seventh occurrence.”

It is also worth mentioning the Federal Reserve when discussing the potential causes of BTC's price increase from early September to the present. The analysis by CryptoQuant overlooked this aspect.

On September 18, the US central bank announced a key interest rate cut of 0.5%, marking the first reduction in over four years.

At the time, BTC's price stood at $59,000, but it soared past $66,500 in the following week or so. This is because bitcoin, still being considered a riskier asset, is among the biggest beneficiaries of lower interest rates as “money becomes cheaper.”

It would thus be interesting to follow what the Fed will do next, with Chair Jerome Powell expected to share more on the bank's policy later today, September 30. With the Fed set to announce even more rate cuts, BTC's price could indeed resume its bullish rally and perhaps even challenge a new all-time high by year-end.

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