Bitcoin exceeds $126,000 without being overbought

Bitcoin just crossed $126,000, but the market remains surprisingly silent. This rise without excitement, rare in a world where spectacular rises often precede violent declines, calls out to analysts. Unlike usual cycles, the apparent calm of metrics fuels both confidence and curiosity. Should we see the beginnings of a new paradigm for the flagship crypto asset?

A dynamic still under control according to analysts

This Monday, October 7, bitcoin exceeded $126,000, reaching an all-time high and reinforcing the conviction of a bull market.

However, unlike previous cycles, this progression is not accompanied by signs of overheating. Arab Chain, contributor at CryptoQuant, declared that “despite this strong performance, technical indicators suggest that the price is still moving within a stable range, far from the overbought conditions that typically precede all-time highs”.

This observation might come as a surprise, but it is based on a careful reading of the technical signals available.

Here are the main elements highlighted in CryptoQuant's analysis:

• BTC’s 30-day moving average is just below $116,000, indicating a gradual climb;

• Low volatility with a standard deviation of $4,540, reflecting price compression;

• Bitcoin growth ratio steadily increasing since May 2024;

• Positioning in the post-halving cycle: according to history, peaks occur up to 600 days after the halving, which suggests that bitcoin is still in an intermediate phase of its market cycle.

In short, the technical data argues for controlled progression, far from the emotional excesses often associated with market peaks. For Arab Chain, bitcoin is entering a phase of “balanced bullish momentum”a rare state in the asset's history, which could precede a new bullish impulse if liquidity continues to flow.

The ETF effect: towards an institutional rush in the fourth quarter?

While on-chain indicators point to a controlled market, another dynamic stands out: that of American Bitcoin ETFs, which are accelerating.

For Matt Hougan, investment director at Bitwise, the fourth quarter could be one of all records. He asserts that “the stars are aligned for a very strong fourth quarter in terms of flows, more than enough to set a new record”.

To support his analysis, Hougan points out that ETFs have already recorded $22.5 billion in inflows over the first nine months of this year, and that $3.5 billion was captured in just the first four days of the fourth quarter.

For him, this dynamic is explained by an often counterintuitive mechanism: “While it may seem counterintuitive, higher prices often stimulate greater demand for Bitcoin ETFs”because they attract the attention of the media, individual investors and institutional investors.

However, the real novelty comes from large wealth managers, more and more of whom are opening their platforms to crypto ETFs. He cites in particular an internal report from Morgan Stanley, published in October, which recommends to its 16,000 advisors to allocate up to 4% of their portfolio to cryptos, as part of a multi-asset approach adapted to profiles with high risk tolerance.

This structural evolution, combined with what Hougan calls the “debasing trade”the strategy of positioning itself on assets resistant to dollar depreciation, reinforces the appeal of crypto ETFs. As gold and bitcoin perform in this tight monetary environment, advisors are looking to incorporate the best-performing assets into their clients' annual balance sheets. “There is only one way to achieve this: buy gold and bitcoin”concludes Hougan.

As the end of the year approaches, attention will therefore be focused on two fronts: the stability of the spot market and the capacity of derivative products, such as ETFs, to channel the inflow of institutional capital. If this double dynamic is confirmed, the fourth quarter could not only break records, but also permanently establish bitcoin in the universe of reference assets.