Bitcoin Stuck In Macro Purgatory—Top Analyst Says Q4 Or Bust

On August 5, 2005, he wrote: “Macro Monday” Livestreamed, Josh Olszewicz, an expert in crypto, reviewed the late summer market. He argued that, while Bitcoin has slowed down, the cycle as a whole is still intact. “We’re in this pocket of seasonal weakness for August and September that we typically see most years,” He pointed to charts of seasonality that showed historically Bitcoin’s underperformance in the time period. “It’s a high likelihood that August and September is a giant nothing burger,” He added.

Has the Bitcoin bull run ended?

Olszewicz said that many investors ask a simple, but fundamental question: Is the cycle over already? Is it going to end this year or next? Is there still more to come? He was cautiously optimistic in his answer. “I’m in the ‘probably not over yet, could continue’ camp,” He said. “But we will have to see what happens in Q4. Ultimately, that’s going to determine it.”

Analysts do not see any reason from a technological standpoint to proclaim that the top has arrived. “Technicals still look fine. Price still looks okay. We had a pullback. All that is fine,” Adding that Bitcoin’s parabolic growth has yet to be seen, he noted the fact that it is not at the top of a major peak. Other macro and on-chain indicators have also not displayed signs of terminal heating. “We don’t have other metrics screaming from the rooftop saying it’s time yet.”

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Short-term, however, is lacking in excitement. After a cup-and-handle breakout that briefly pushed price toward the $122,000–$123,000 region, momentum faded. Olszewicz doubts such levels can be reclaimed soon: “In the next two weeks we’ll know if we can start to creep back towards $120,000, which is asking a lot admittedly for August.” “The wildcard,” he added, are ETF flows. Do we observe ETF flows? What then do we see? treasury companies Continuing to purchase? “Those are marginal buyers at the moment.”

I suggested to him that ETF buyers The combination of a low-weight position, dip buying and monthly rebalancing could bring about a return. Overall, however, he is neutral. “Just a general softening of any bullishness we may have had,” He said. “Now it’d be a different story if this is October and we’re seeing this. That’s not normal.”

Another reason to caution is the decline in the futures base across major assets. “Premium is all the way down to under 7% on BTC. It’s under 8% on ETH. And I think SOL is a little more illiquid, but even SOL is way down—15% from 35%,” He said. This contraction of futures premiums, which is usually a sign that speculative interest has dried up, reflects an overall risk-off attitude. “Not a lot of bullish sentiment, not a lot of craziness,” Olszewicz observed.

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The trend is confirmed by the on-chain risk metrics. “There’s a decline here in risk appetite,” He was referring to metrics, such as the unrealized profit and the difference between MVRV. He said that Bitcoin would enter a parabolic advance. “you will see this metric shoot up… But what’s it going to take?”

Q4 or Bust

The possibilities he floated were: lowering of rates, a weakening Fed independenceOr perhaps it’s just macro chaos and seasonal strength in Q4. For now, however, he urged traders to keep their eyes on the market. “take it easy on the 50X leverage,” Especially those who have already achieved significant gains in this cycle. “Do I need to put risk back on? Do I need to be as risky as I was earlier?” He asked rhetorically. “Or does it make more sense to be less risky here?”

A macroeconomic view is mixed. Inflation data from Trueflation remains low—currently at 1.65%—but Olszewicz warned that new post–August 1 tariffs may raise prices in the months ahead. “We are adding inflationary pressures with tariffs, no doubt about it,” He said that the effects will not be seen in data for some time. Meanwhile, core PCE is headed in the wrong direction, and the Atlanta Fed’s GDPNow model is printing 2.1% growth for Q3—hardly recessionary, but not robust either.

Data on the labour market continue to cloud future prospects. “If we account for a non-collapsing labor force participation, we could be as high as 4.9% on the actual unemployment rate,” Olszewicz warned. “And we’re continuing to see a degradation in job availability for manufacturing,” Particularly in “Heartland Rust Belt types of jobs.”

The dynamics of liquidity are changing as well. He called out the draining. Fed’s reverse repo facility—once a $2 trillion reservoir of sidelined capital—which has supported risk assets through 2023 and 2024. “As this gets drained closer to completion, there’s a potential likelihood for liquidity hiccups and a liquidity intervention by the Fed,” He said. This has been important in keeping overall US liquidity flat and offsetting quantitative tightening. The reverse repo drain has compensated for quantitative tightening. QTThis metric shows that US liquidity is basically flat from 2022.

Olszewicz says that the spot Bitcoin ETFs, not the liquidity, changed everything. “That has really been, in my opinion, a big difference maker,” He clarified. “We got ETF approvals here, ETF started trading here, and the rest is history as far as flows are concerned.”

Olszewicz’s conclusion was that while there are signs that Bitcoin has reached its peak, there has been no sign that it has yet. “The cycle’s probably not over,” He said. “It’s just sleeping—and Q4 will ultimately determine whether it wakes up.”

BTC was trading at $113.041 as of press time.

Featured Image created using DALL.E and chart from TradingView.com