Bitcoin's Bear Market May Soon Be Over, Cautiously Optimistic Outlook for Q4
The outlook for Bitcoin has turned cautiously optimistic as it enters Q4. This shift in sentiment is driven by renewed ETF purchases, compelling valuations, and an improvement in buy-and-hold behavior among investors.
Bitcoin's historically-reliable 4-year halving cycle suggests that the bear market may soon be coming to an end. The last halving took place in April 2024, reducing the 'inflation rate' of Bitcoin's supply to below 1% per year. Previous halvings have marked a transition from a bear market to a bull market.
Looking at technical indicators, the balance of risks for Bitcoin has shifted to the topside, with the near-term bias outright bullish above $80K. The MVRV (Market Value to Realized Value) Z-score, which compares the current price to the price where each Bitcoin was last traded, has bounced to 0.8, closer to the typical bear market bottom zone.
Long-term holders have also become more optimistic, with the proportion of Bitcoin held for at least a year rising above 63%. However, renewed selling from longer-term 'HODLers' may offset inflows into ETFs in Q4.