Key Takeaways:
- Bitcoin may underperform in Q3 due to overly bullish retail sentiment and historical seasonal weakness, with analysts warning of a potential pause before a true breakout.
- Ethereum is drawing increased investor attention as it recovers from April lows, positioning itself as a potential outperformer amid Bitcoin’s consolidation.
Bitcoin’s momentum could falter in the third quarter, giving Ethereum a chance to steal the spotlight, according to market analysts. Despite Bitcoin (BTC) hovering just 2.1% below its all-time high of $111,970—reached on May 22—analysts warn that market sentiment might be too bullish too soon.
Speaking to Cointelegraph, Santiment’s Director of Marketing Brian Quinlivan explained that “markets move the opposite direction of retail’s expectations,” noting that the persistent calls for new BTC highs across social media suggest the asset may not be primed for an immediate breakout. “All-time highs tend not to follow when doubt is absent,” Quinlivan said.
BTC is currently trading at $109,679, and the Crypto Fear & Greed Index reflects a “Greed” level of 72, indicating overheated sentiment. Quinlivan believes that a few more “frustrating” near-misses could dampen retail enthusiasm, paving the way for a more sustainable rally later on.
Adding to this cautious outlook, Dr. Sean Dawson, head of research at Derive, told Cointelegraph that Bitcoin is likely to underperform in Q3. Since 2013, Bitcoin has averaged just a 6.03% return in the third quarter—its weakest historically—compared to an 85.42% average gain in Q4, according to CoinGlass data.
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Macroeconomic conditions may also weigh heavily. The Federal Reserve is widely expected to keep interest rates unchanged at its June 18 meeting, which could dampen speculative demand for Bitcoin. “Despite political pressure for rate cuts, the Fed seems poised to keep interest rates steady,” Dawson said.
In contrast, Ethereum (ETH) could be poised for a rebound. The second-largest cryptocurrency has been “playing catch-up” since hitting a low of $1,472 in April and has since climbed to $2,793. Quinlivan noted a “high level of optimism” shifting toward ETH, as it benefits from profit rotations following Bitcoin’s earlier gains.
Seasonal trends may also affect market activity. Dawson pointed out that summer typically leads to lower trading volumes as investors go on holiday, increasing the likelihood of sideways price movement or even sharp pullbacks.
As Bitcoin faces seasonal and psychological headwinds, Ethereum may emerge as a dark horse for Q3 gains.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
