As we enter Q4 of 2024, the price of Bitcoin has remained strong, holding above $62,000, on Gate.io, supported largely by positive signals from both on-chain and derivatives market data.
According to market analysts, traders are bracing themselves for another bullish run as Bitcoin has shown recovery in the past one and a half months after slumping to a recent low of $49,500 on August 5 Black Market Day.
However, CryptoQuant’s data reveals that Bitcoin exchange reserves on centralized platforms have dropped to their lowest levels in several years. Since late July, the amount of Bitcoin on exchanges has decreased from 2.75 million to approximately 2.67 million—a 3% reduction over the past month.
The data also indicates an 11% reduction in Bitcoin reserves on centralized exchanges since the beginning of the year, coinciding with a nearly 43% increase in Bitcoin’s price since January. Therefore a lower supply of coins on exchanges typically eases selling pressure, which can support further price increases.
Positive Indicators in the Options Market
Experts in the crypto trading world point out that derivatives market indicators suggest traders are preparing for bullish movements in Bitcoin’s price. The expert noted that market sentiment remains positive, with the highest open interest for Bitcoin options being the $100,000 call.
Derivit data for upcoming expiries shows that the largest concentration of options is for calls at strike prices of $100,000 and $105,000. The top options contract by trading volume in the past 24 hours is a call option with a $75,000 strike price expiring at the end of the month.
The expert also mentioned that Ethereum’s derivatives market is showing similar optimism, with the highest open interest at the $4,000 strike price for a September expiry call option, followed by a $6,000 strike price for December.
The expert further observed that there is a noticeable lack of put options in the open interest distribution for both Bitcoin and Ethereum, with the top 10 open interest positions being exclusively call options, signaling strong bullish sentiment.
BTC Price Reacts to Fed Chair
Bitcoin’s price saw an uptick on Friday as Federal Reserve Chairman Jerome Powell hinted at upcoming rate cuts, suggesting that the U.S. central bank is satisfied with the cooling inflation while paying closer attention to the growing weakness in the labour market.
Powell stated that the direction of policy is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving economic outlook, and the balance of risks. He made these remarks during his keynote address at the Jackson Hole Economic Policy Symposium in Wyoming. Following Powell’s comments, Bitcoin’s price rose above $63,500.
Market confidence has grown that the Federal Reserve will ease its stance on inflation after holding its benchmark interest rate steady since July 2023. As of now, traders are assigning a 32% probability of a 0.50% rate cut in September, while a 67% chance is given to a 0.25% cut, according to CME Fedwatch.
Inflation had surged to a 40-year high of 9.1% in June 2022, driven by the U.S. economy’s rapid recovery from pandemic-related slowdowns. In response to rising consumer prices, the Federal Reserve increased interest rates to their highest levels since 2007.
A research associate at 21Shares explained that generally, a rate cut is favorable for risk-on assets, which typically benefit from increased investor appetite as borrowing costs decrease. She added that Powell’s remarks reassured investors that it might be time for the Fed to change its policy if upcoming economic data aligns with expectations.
Conclusion
 Whether Bitcoin will see another bullish run in Q4 will depend on the combination of a number of factors with the Fed cut being the most prominent. Meanwhile, crypto traders are already bracing up for Bitcoin to reach the magic number of $100,000.
