Three Key Factors That Will Drive Bitcoin Price Performance in Q4

There are three crucial factors – primarily US-related – that will drive the performance of Bitcoin (BTC)’s price in the fourth quarter of this year, according to the latest CoinMarketCap’s Quarterly Report.

Firstly, the report discussed significant macroeconomic conditions.

Many are focused on the US Federal Reserve’s rate decisions, as has been the case recently as well.

However, the report noted the “crucial role” that broader economic indicators play, including productivity indicators, unemployment data, and inflation.

Indications of a recession could limit BTC’s upside potential, since investors would become more reluctant to take risks.

Therefore, said the report, “if there are strong signs that the US is headed for a recession, it will be difficult for Bitcoin to experience a sustained bull market.”

Another relevant factor is political influence.

Per the researchers, US policies toward crypto are key. Positive regulation or clear guidance could boost the price increase.

Negative sentiment or stricter regulation in this country could “dampen enthusiasm.”

Source: CoinMarketCap

The third crucial factor is the level of institutional investment. The amount of capital going into Bitcoin exchange-traded funds (ETFs) and the broader crypto space will demonstrate market confidence.

“Strong institutional inflows could significantly boost BTC prices, potentially driving a more pronounced rally in the fourth quarter,” the report remarked.

BTC Could Hit a New All-Time High by Year’s End

The third quarter of 2024 was marked with a bearish trend across the crypto market. This wasn’t unexpected, as it aligns with typical historical patterns for this period.

Several major factors created notable downward pressure. These include macroeconomic factors, governmental wallet sell-offs, post-FTX liquidations, the meme coin market crash, and the US Federal Reserve rate decision.

The Q3 Market sentiment has been consistently bearish, the researchers said.

The period saw BTC testing lows in the low $50,000 range, while the Crypto Fear and Greed Index indicated Fear in the market at a score of 30-40.

The Crypto Fear and Greed Index runs from 0 to 100. A lower score suggests more fear in the market. Higher score indicates flourishing greed.

At the time of the report, however, this score climbed to 53, which is a neutral sentiment.

Source: CoinMarketCap

That said, the fourth quarter may bring a shift out of volatility and negative sentiment toward more stability.

“What the market really craves right now is predictability,” the researchers said.

The upcoming events in the US – particularly t he presidential election in November – are “likely to settle some of the uncertainty regardless of the outcome.”

Importantly, based on historical data, Q4 has generally been a strong period for the world’s number one crypto.

BTC has yielded a 90.33% price increase on average in Q4 for the past decade.

Additionally, the market has entered this year’s fourth quarter “from a relatively low price level.”

Therefore, we may see a new record price by the end of this year.

According to the report, “with these factors in mind, there’s a significant chance that we could see a price pump during the remainder of the year, potentially even pushing Bitcoin towards another all-time high.”