An important report about the third quarter of 2023 of the Bitcoin and cryptocurrency market came from Fidelity. According to the report, there are short-term concerns in the cryptocurrency market. However, there is an overall positive outlook for Bitcoin and Ethereum in the long term. Let’s take a look at the key findings from this quarterly report.
Bitcoin BTC’s short-term hurdles
Bitcoin faced difficulties in Q3 despite its impressive 65% year-to-date gain. The cryptocurrency has fallen below key short-term support levels, causing uneasiness among investors. However, a glimmer of hope emerged as long-term holders increased their net positions, indicating they were willing to buy on a dip below $30,000. For BTC, the report emphasizes a short-term period of 12 months and a medium-term period of 1-5 years. Accordingly, Fidelity expresses the overall rating as neutral. As can be seen in the table, attention was drawn to the fact that it is below the 200-day average in the short term. There is also a reference to the death cross that occurred on September 12. On the other hand, there is a sign that the price is 33% above the realized value. Eight metrics focus in the medium term. There is no negative situation here either.
Fidelity points out that one notable trend is the continued outflow of Bitcoin BTC from exchanges. Data shows a nearly 30% decrease in stock market supply compared to the 2020 peak. This trend underscores the importance of a variety of custody options, including self-custody and the use of regulated third-party custodians such as Fidelity Digital Assets. The decline in stock market supply is a crucial metric to monitor as we approach the end of the year. Fidelity rating for Bitcoin is positive in the long term.
Highlights for Ethereum
Fidelity’s emphasis on Ethereum, which has achieved a significant gain of 40% since the beginning of the year, attracts attention. Accordingly, Ethereum encountered short-term negative price signals. However, it has demonstrated strong on-chain metrics that provide reasons for optimism. The network’s close rate has consistently exceeded the issuance rate. Since the implementation of The Merge nearly a year ago, almost 300,000 Ethereum has left the network. Accordingly, this situation emphasized deflationary dynamics. In the report, Fideltity sees Ethereum as positive in the long run, like Bitcoin.
Another bright spot for Ethereum is the significant increase in the number of validators staking on the network. Accordingly, there is a strong growth of 28%. This situation is already mentioned in the report. These validators contribute to Ether’s network flexibility. It also plays a crucial role in securing the network and verifying transactions.
Third quarter marks a mixed performance
According to the report from Kriptokoin.com, the 3rd quarter of 2023 was a mixed performance period for Bitcoin and Ethereum. Short-term concerns such as Bitcoin falling below support levels and ETH price signals raise questions. However, the long-term outlook for these cryptocurrencies remains positive.
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