BTC Faces Crucial Hurdles in Q4: Fed, Liquidity, and $87,500

Bitcoin's Q3 was marked by a powerful recovery from its lowest price in over a year and a half to reach above $80,000. Analysts warn that this trend may not continue into Q4, citing key factors such as the Federal Reserve, Treasury-market liquidity, ETF flows, geopolitics, and BTC's ability to clear $87,500.

Iliya Kalchev, Nexo Dispatch Analyst, attributed the rebound in August to a catalyst from the bond market after the US Treasury increased the size of its long-end bond buyback operations. The asset jumped by 7% on August 19 and rose over 20% in the following days.

However, Kalchev cautioned against expecting another straight-line rally, citing the median gains of around 9% seen in previous Q4s, with spectacular years like 2013 and 2017 skewing the average.

Alex Kozenko, CMO at WhiteBIT, also warned that institutional participation has become more prominent and flows through regulated investment products have become a source of influence on market dynamics. Lacie Zhang, Research Analyst at Bitget Wallet, believes the Fed will hike rates again by 25 basis points on October 28.