Analysts Say Market Ready for Explosion, Predict ‘Regime Shift’ Toward Altcoins

In a recent research note, Swissblock analysts highlighted the September recovery rally Bitcoin has just pulled off. Despite falling 3% in the past 24 hours, closing the month lower than many had anticipated, the OG crypto still managed an overall 7% gain in September, up from just US$58k (AU$83.9k) at the start of the month.

Swissblock Says Stage Set for Altcoins to Shine

While the Fed rate cut in September has helped BTC to rally, the analysts say China’s recent stimulus measures paired with the potential for FTX repayments are cause for optimism among crypto investors.

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Swissblock added that while Bitcoin has shown “stability and strength”, the risk index pictured in the Speedometers remains unchanged at zero. The indicators also show bullish price momentum and neutral on-chain fundamentals.

The analysts highlight how this in combination makes the case for altcoins:

This, combined with the price momentum turning bullish, sets the stage for Bitcoin to consolidate as Altcoins break away from its reference and establish their own patterns, signaling a regime shift toward Altcoins.

Swissblock

Bitfinex Says Market Could be Overheating

Bitfinex analysts have a slightly different view and a warning for investors. While they acknowledge that historically October is the month with the highest returns, there are some indicators that the market may have reached “a temporary equilibrium”.

The analysts wrote that while some metrics have reached key levels, others, like spot market buying have flatlined.

While Bitcoin has reclaimed key on-chain levels such as the Short-Term Holder Realised Price (currently $62,750), there are warning signs. Spot market buying, which had been aggressive since the September 6th local bottom, has recently flattened.

Bitfinex

Additionally, open interest (OI) has sky-rocketed past US$35 billion (AU$50.6 billion) which is historically a sign of “local price peaks”.

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There’s also concern about potential market overheating, though a minor correction by 5-10% “could reset OI without disrupting the overall uptrend”.

The analysts note that Bitcoin is consolidating between US$50k (AU$72.3k) and US$68k (AU$98.3k), similar to 2020. And if history is anything to go by, we may see a new ATH by year end:

Bitcoin could be poised for a new all-time high by the end of Q4 2024 or early 2025, supported by declining exchange reserves and reduced passive selling pressure.

Bitfinex