Crypto Report | September 2024

Key Takeaways

August saw significant declines in cryptoassets and traditional financial markets due to U.S. recession concerns and a sharp rise in the Japanese Yen. Despite this bearish sentiment, we anticipate a tactical bottom for Bitcoin, driven by expectations of looser Fed monetary policy, which could signal the start of a renewed bull run.

The simultaneous macro and crypto sentiment capitulation in early August has provided a good basis for a more sustainable bottom in Bitcoin. In addition, we think that the fact that Bitcoin has become less sensitive to changes in global growth expectations, the turnaround in global monetary policy combined with a broad Dollar weakness could provide a very positive macro tailwind for Bitcoin and cryptoassets going forward.

The persistent slowdown in on-chain capital flows into major cryptoassets still suggests that the current consolidation could continue. However, we are observing an improvement in on-chain signals across different indicators that suggest an improvement in overall on-chain activity in bitcoin. Significant sources of selling pressure such as the BTC miner capitulation are already behind us and also the Mt Gox distribution is already 2/3rds completed. Bitcoin whales have become net accumulators of bitcoin again and net buying volumes on spot exchanges have also reversed to a 3-month high more recently signalling a renewed increase in risk appetite.

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