[Bitcoin Reaches a Fresh ATH, Supported by Seasonality]
In contrast to the weak early August, bitcoin was able to reach new all-time highs this week, rising to $123,700 on the 14th of August. I expect bitcoin's historical seasonality to carry it higher in the third (Q3) and upcoming fourth (Q4) quarters. If BTCUSD correlates with 2017’s market structure, we could see the asset rising until mid-December, before a major correction.
[Deployable Capital on Binance]
Binance's stablecoin reserves remain high, and reflect sidelined capital waiting to be deployed into the market, ready to flow into assets like Binance Coin (BNB), and higher beta tokens. As bitcoin will likely retest its previous ATH level again, selected altcoins will follow it in correlation, creating an optimal environment for an altseason.
[Net Unrealized Profit (NUP)]
CryptoQuant's Net Unrealized Profit (NUP) metric quantifies the total unrealized gains of bitcoin investors. The metric is calculated as the sum of the value of unspent transaction outputs (UTXOs) that are in profit, divided by the market capitalization. The metric assumes that the most recent coin movement represents a purchase.
[Price Discovery Zone]
The current Net Unrealized Profit levels are still relatively low compared to bitcoin's previous spot price peaks in Q1 and Q4 of 2024. The low NUP level mirrors short-term upside potential and the continuation of price discovery. When the NUP reaches values around 0.64, the market is closer to correction.
Price discovery is the process in which the market determines the price of an asset through the interaction of buyers and sellers. It reflects the balance of supply and demand, incorporating all available information, such as economic data, market sentiment, and external events, to establish bitcoin's current market value.
Fueled by Binance’s stablecoin reserves, bitcoin’s price discovery will likely continue from here, offering upside before a (potential) late-Q4 correction.
Written by oinonen_t
