Bitcoin can see further gains, but data on the chain shows warning signs: Bitfinex

Last week was positive for bitcoin (BTC), the asset broke the high of $65,200 in the area on August 25 after several earlier declines. While BTC is currently trading below the $65,000 range and could record further gains, analysts say there are warning signs.

According to the Bitfinex report, there is a lack of spot market attack, which means that demand has faded and the possibility of Bitcoin price approaching equilibrium or a fair value based on market conditions. BTC needs a catalyst to re-ignite its upward momentum.

The most positive September

As the fourth quarter began, BTC hovered in a broad consolidation range between $50,000 and $68,000, a pattern usually seen in semi-annual periods.

Last month, September saw the leading digital asset close up more than 7% in its most positive monthly price performance on record. BTC has recovered 25% from its September 6 low of $52,756. The asset's rise above $66,500 marked the first significant move above the area's highs since early August 2024.

Bitcoin has now surpassed key levels on the chain, such as the short-term owner's guaranteed price (STHRP) of $62,750. Bitfinex says staying above this line is a critical indicator of a bull market trend.

Several historical patterns suggest that BTC may reach a new all-time high (ATH) in late Q4 2024 or early Q1 2025. Bitfinex indicated that this forecast is based on similar market volatility and investor sentiment from previous post-half cycles.

Although these historical patterns and trends paint a positive picture, other data on the chain indicate that BTC may not see the significant bullish momentum needed to hit a new ATH in the near future.

Warning signs

At the current price, the spot market attack has seen a decline, indicating urgency to buy BTC. The flat spot coincides with an increase in open demand in the forward and futures markets, indicating that investor participation is also on the rise.

In addition, bitcoin open interest rose for the sixth time to $35.35 billion, raising concerns about the market overheating. Such contractions coincided with local highs and eventually led to collapse.

“This pattern suggests caution, as in previous periods price trends preceded corrections, indicating that we are approaching another critical phase in market volatility,” Bitfinex explained.