oinonen_t2025-09-17

Approaching Q4, What to Expect?

[Approaching Q4] The relatively uneventful crypto September soon gives way to October, bringing along the last quarter of 2025, the Q4. Looking towards the next quarter, I expect elevated levels of crypto volatility, and decreasing bitcoin dominance. Ethereum, and bitcoin in correlation, will continue to reach new all-time highs, supported by seasonality, while a major correction is likely ahead by Q1 of 2026. [Bitcoin’s Energy Value Model and “Fair Value”] In addition to seasonality, cryptocurrencies are supported by bitcoin’s Energy Value Model (EVM), or “fair value”. The model, created by Charles Edwards of Capriole Investments, places bitcoin’s target price between $145,000 and $168,000. Using $145K as a reference, bitcoin currently ($115K) trades at a 20 percent discount to its energy value, or fair price. Assuming that bitcoin reaches towards its energy value, we could easily see bitcoin reaching $150K in Q4, potentially approaching $200K. [Estimated Leverage Ratio] Another factor indicating further upside ahead is CryptoQuant’s Estimated Leverage Ratio (ELR), which has clearly been elevated in August and September: While dropping to 0.18 in late June, the ELR has recently been around 0.20. Estimated Leverage Ratio mirrors how much leverage investors are using on average. Elevated ELR tells about investors and traders anticipating a positive quarter ahead to fulfill their derivatives-based risk appetite.