CryptoQuant Says Weak Demand Could Cause Sluggish BTC Performance Despite ‘Uptober’

Bitcoin’s current trends mimic its successful years of 2016 and 2020, yet demand has stagnated since July.
US spot ETFs, particularly BlackRock’s IBIT, drive demand by adding significant Bitcoin holdings.
Despite substantial outflows from Grayscale’s GBTC, the US funds collectively hold over US$56 billion in Bitcoin.
Analyst Willy Woo forecasts a delayed Bitcoin ATH, expecting sideways movement through late year but remains bullish long-term.

Up or down? Is it ‘Uptober’, or not? Confused about the way the crypto market has started October, which is supposed to be a stellar month? Well, analysts at CryptoQuant can shed some light on that for us.

In a recent report, the analysts write that, so far, Bitcoin is closely following its performance in 2016 and 2020 – when BTC gained 59% and 171% respectively – but there’s one metric to keep an eye on.

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US Spot ETFs Positive Driver of Demand

Demand growth has been stagnant since July; the analysts highlight that this contrasts enormously with the demand in April, which indicates “there’s room for demand to catch up in Q4”.

One driver for Bitcoin demand is of course the exchange-traded funds (ETFs) in the US. There’s been quite some interest in IBIT and Co recently. The largest fund alone, BlackRock’s IBIT, has added US$612 million (AU$890 million) to its coffers in the past seven trading days – that’s roughly 10,000 BTC, depending on the exact price paid.

As per the latest data, the fund now holds an impressive 367k Bitcoins, or 1.7% of all 21 million BTC ever.

IBIT Bitcoin holdings, source: iShares/BlackRock

The eleven funds combined now hold 926,638 Bitcoins valued at US$56.7 billion (AU$82.6 billion). Since the launch of the new funds in January 2024, Grayscale’s GBTC has experienced over US$20 billion (AU$29 billion) in outflows.

Willy Woo: It Will Take Time for Bitcoin to Reach New ATH

As per CryptoQuant’s analysis, a recovery of Bitcoin demand could lead Bitcoin reach up to US$85k-100k (AU$123.7k-145.5k) this quarter.

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However, long-term observer Willy Woo thinks it will take some time for the price of BTC to reach new all-time highs (ATH). He suggests Uptober could be off the cards and we may see more sideways trading until later in the year – though this doesn’t change his long-term outlook.

Structure mid term is bearish moving to neutral and trying to get bullish. ATH will take time. Short term structure suggests 1-3 wks stand down to cool off before the next bullish attempt. I don’t think we get Uptober, sideways Oct, and Nov-Dec for laser eye parties. Long term is bullish.