"Is Bitcoin in Hibernation? Experts Warn of Q4 or Bankruptcy"

In the live stream "Macro Monday" on August 5, cryptocurrency analyst Josh Olszewicz provided an assessment of the end-of-summer market situation, arguing that although Bitcoin prices have stagnated, the overall cycle remains intact. "We are in a seasonal weakening phase in August and September, a phase we often see in most years," he explained, while pointing to seasonal charts showing that Bitcoin typically performs poorly during this time. "It is highly likely that August and September will be a hollow period," he added. Has the Bitcoin price increase ended? On the 978th day of the current cycle, Olszewicz noted that the question many investors are asking is very simple yet crucial: has the cycle ended? Will it end this year? Or is there still more growth ahead? His answer is somewhat cautiously optimistic. "I belong to the group of 'maybe not over, may continue,'" he said. "But we will have to wait and see what happens in Q4. Ultimately, that will decide everything." Technically, the analyst sees no reason to claim that a peak has occurred. "The technical indicators are still stable. Prices are fine. We have had a pullback. Everything is okay," he said, emphasizing that Bitcoin has not yet shown the typical parabolic increase often seen at major peaks. Other macro indicators or on-chain metrics have also not shown signs of overheating. "We do not have any other indicators signaling that the time has come." However, the short-term setup is not very impressive. After breaking through the cup-and-handle pattern (cup-and-handle) pushing the price up to the 122,000–123,000 dollar range for a short time, the momentum has weakened. Olszewicz doubts the likelihood of regaining this price level soon: "In the next two weeks, we will know whether we can start to return to the 120,000 dollar mark or not, a figure quite high compared to August." He stated that the main uncertainty factor is the ETF capital flow. "Will we see ETF capital flow for some reason? So will the fund management companies continue to buy? It's just the current small retail buyers." He believes that ETF buyers may return due to a combination of short selling positions, opportunistic buying when prices drop, and monthly rebalancing incentives. However, overall he maintains a neutral stance. "It's just the general weakening of any optimism we may have had," he said. "Things would be different now if this were October and we were witnessing this. That's not normal." Another reason to be cautious is the collapse of futures contract bases across major assets. "The premium has dropped below 7% for BTC. Below 8% for ETH. And I think SOL is a bit less liquid, but even SOL has dropped sharply - 15% from 35%," he noted. The decline in futures contract premiums, often a sign of dwindling speculative demand, reflects broader risk-averse sentiment. "There's not much bullish sentiment, nor much craziness," Olszewicz commented. The on-chain risk metrics confirm this trend. "There is a decrease in risk appetite," he said, referring to metrics such as unrealized profits compared to MVRV. He added that if Bitcoin enters a parabolic rally, "you will see this metric soar... But what will happen?" Q4 Or Bankruptcy He presented a few possibilities: interest rate cuts, weakening Fed independence, or perhaps just seasonal strength and macro instability in Q4. But for now, he advises traders to "be cautious with 50x leverage," especially those who have made significant profits in this cycle. "Do I need to take risks again? Do I need to take risks like before?" he asked rhetorically. "Or should it be more reasonable to reduce risk here?" From a macroeconomic perspective, the picture is quite complex. Inflation data from Trueflation remains low - currently at 1.65% - but Olszewicz warns that the new tariffs after August 1 could drive prices up in the coming months. "We are increasing inflationary pressure through tariffs, there is no doubt about it," he said, although the impact will take time to show up in the data. Meanwhile, the core personal consumption price index (PCE) is going in the wrong direction, and the GDPNow model from the Atlanta Federal Reserve is forecasting a growth rate of 2.1% in Q3 - not a recession, but not strong either. Labor market data continues to cloud the outlook. "If we take into account the unchanged labor force participation rate, the actual unemployment rate could reach 4.9%", Olszewicz warned. "And we are continuing to witness a decline in the number of jobs in the manufacturing sector", particularly in "the types of jobs under the Central Iron Rust Industrial Belt". Liquidity dynamics are also changing. He notes the gradual withdrawal of the Fed's reverse repo mechanism — which was once a $2 trillion reserve that was overlooked — that has supported risk assets throughout 2023 and 2024. "As this nears completion, there is a potential for liquidity disruption and the Fed will intervene in liquidity," he said. Importantly, this has kept overall liquidity in the United States stable, offsetting quantitative tightening. "Despite QT, the gradual withdrawal of reverse repo has compensated for QT, and U.S. liquidity has essentially stabilized since 2022." Olszewicz stated that what changes the landscape is not liquidity, but the launch of spot Bitcoin ETF funds. "In my opinion, that really makes a big difference," he explained. "We have received approval for the ETF here, the ETF starts trading here, and the rest is history in terms of cash flow." In summary, Olszewicz emphasized that although risk appetite has generally decreased and price volatility remains bleak, there is still no evidence that the Bitcoin cycle has peaked. "This cycle may not be over yet," he said. "It is just in hibernation—and the fourth quarter will ultimately determine whether it wakes up or not."