Bitcoin has once again shown its resolved resiliency by bouncing back above the $38,000 threshold. This recovery comes on the heels of a brief dip below $37,000 amidst last week’s upheaval surrounding crypto exchange enforcement actions. But true to form, the bellwether cryptocurrency quickly reclaimed critical support.
- Bitcoin price rebounded back above $38k after dipping below $37k earlier this week
- Bullish sentiment driven by upcoming 2024 halving event and belief $35k level will hold as new support
- On-chain data shows most holders not panic selling at loss anymore, indicates bottoms are in
- Analysts predict BTC could reach $100k by end of 2024, driven by spot ETF approvals
- Bloomberg experts forecast high chance of SEC approving Bitcoin spot ETFs by January 2024
This demonstration of stability restored confidence for investors as BTC projects strength heading into several potential macro catalysts that could propel prices to fresh all-time highs in 2024.
Most immediately, bitcoin appears to be anticipating its next supply squeeze as the block reward halving draws nearer. With the quadrennial event expected in mid-April 2024, history suggests the year leading into halvings produces tremendous fireworks.
Previous cycles show BTC ranges from 2x to 10x in USD terms from one year prior to the halving date. The timing of the current cycle puts prices right in the middle of what could be an explosive run-up based on these historical templates.
Sentiment Shift Underway
But it’s not just the programmed supply cuts working in bitcoin’s favor. The fundamental backdrop also caters to an asset designed as a hedge against inflation and currency debasement.
While the Federal Reserve’s aggressive interest rate hikes crushed risky assets in 2022, the central bank looks to reverse course sooner than expected. Multiple officials already hinting at potential rate cuts by mid-2023 could provide a sentiment boost to bitcoin.
This policy shift paired with early signs of disinflation offers a prime setup for alternatives to fiat currency like BTC to shine.
Even against the gloomy economic projections, a growing chorus of analysts predict bitcoin still has room to run after lagging most risk-on rebounds thus far.
PlanB, the creator of bitcoin’s popular stock-to-flow model, boldly declared prices will never again dip below $35,000. The widely-followed Twitter account also maintains a year-end 2023 target of $100,000 per BTC.
????BREAKING: Bitcoin valuation based on difficulty (hashrate) increased to $35k yesterday. IMO this could mean that, apart from possible black swans or short term volatility, based on $/kWh-arbitrage fundamentals … BTC will never go below $35k ever again. pic.twitter.com/JPLkXieQAP
— PlanB (@100trillionUSD) November 27, 2023
Wall Street investment bank Standard Chartered recently reiterated the same six-figure price forecast to close out 2024. The main driver remains U.S. approval of a spot bitcoin ETF, which the strategists now expect could land during Q1 2024 after the SEC expedited decision timetables.
On-Chain Metrics Supportive
These lofty prognostications find support from on-chain activity showing capitulation and an exhaustion of willing sellers following the FTX debacle. Outflows from exchanges have outpaced inflows since the bankruptcy, indicating a strong appetite to accumulate and hold BTC for longer horizons.
SOPR, an indicator tracking whether coins are spent at a profit or loss, spiked downwards as overleveraged traders registered realised losses when liquidated on FTX. This purge of weak hands allows more hardy, long-term buyers to establish positions.
With such a potent mix of positive catalysts surfacing just as bitcoin enters its historic boom phase around the halving, the stage appears set for BTC to reclaim its former highs and make a run at $100k over the next 12 months. But of course, volatility will remain part and parcel of the ride.