Bitcoin looks far from overbought as ‘stars are aligned’ for ETF surge

Bitcoin is currently clear of “overbought conditions” and is set to track a steady path upward despite hitting a new all-time high on Monday, according to analysts. 

Bitcoin () hit a peak high of over $126,000 on Monday, which places it “roughly halfway through its four-year price cycle,” CryptoQuant contributor Arab Chain on Wednesday. 

“Despite this strong performance, technical indicators suggest the price is still moving within a stable range far from the overbought conditions that typically precede historical peaks,” it added.

Bitcoin shows signs of “upward momentum”

Arab Chain stated that Bitcoin “appears to be in a phase of balanced upward momentum,” with its 30-day moving average, which is the average closing price over the last 30 days, being just under $116,000, “suggesting a steady upward trend without sharp deviations.”

It added that Bitcoin’s 30-day standard deviation, or the variability of its returns, was also “relatively low at $4,540, reflecting a compression in volatility, a condition that typically precedes strong price movements, especially upward, if supported by renewed liquidity inflows.”

The analysts said Bitcoin tends to reach its up to 600 days after its , where mining rewards are slashed 50%, and if that pattern continues, Bitcoin is now “within the critical window that has previously led to major bull market tops.”

“Stars are aligned” for record Q4 ETF inflows: Bitwise

It comes as Bitwise chief investment officer Matt Hougan on Tuesday that inflows into Bitcoin exchange-traded funds (ETF) will surge in the fourth quarter.

Hougan said that Bitcoin’s surging price is one of the reasons that inflows into US Bitcoin ETFs “will set a record” in Q4, and will “pull in more money in 2025 than they did in their record-setting first year, when they attracted $36 billion.”

The ETFs have attracted $22.5 billion in inflows in the first nine months of the year, which would put them on pace to end 2025 with approximately $30 billion in flows.

“Here’s a hot take: I’m not worried,” Hougan said. “From where I sit, the stars are aligned for a very strong Q4 for flows — more than enough to push us to a new record.”

He said the “most fundamental” reason he predicts high flows to cap 2025 is that he’s “bullish on Bitcoin returns for Q4.”

“Although it’s a bit counterintuitive, higher prices often spur greater demand for Bitcoin ETFs as the media, companies, and everyday investors pivot their attention to Bitcoin,” Hougan said.

He added that in every quarter where Bitcoin saw double-digit growth, inflows to Bitcoin ETFs also saw “double-digit billions in inflows.”

“Debasement trade,” platform approvals put Q4 at a good start

Hougan said his prediction is also based on a wider range of investors being able to invest in the ETFs as wealth managers open up to them and as traders look to invest in assets that do well with a weakening US dollar.

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Wall Street will look for “The Debasement Trade” to as the US dollar weakens, Hougan said, and gold and Bitcoin have both performed well so far this year.

“Why does this matter? Because when advisers sit down with their clients for their annual review, they want their year-end printouts to show that they hold the most successful investments. There’s only one way to do that: By buying gold and Bitcoin.”

That debasement trade will be helped by some of the largest wealth managers “finally changing” to open up their platforms to Bitcoin ETFs, Hougan said.

He noted a Morgan Stanley report released earlier this month that guides 16,000 advisers said they could “flexibly allocate to cryptocurrency as part of their multiasset portfolio” with a suggested allocation for “risk-tolerant investors.”

Hougan added that Q4 “is off to a great start” with the ETFs taking in $3.5 billion in net flows in the first four trading days.

“We have 64 more days to get another $10 billion,” he said. “I think we’ll do that and then some.”

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