Markus Thielen Predicts a Pre-Christmas Rally Led by Bitcoin
According to Markus Thielen, the Head of Crypto Research and Strategy at Matrixport, there may be a pre-Christmas rally in the crypto market with Bitcoin taking the lead. This prediction is based on recent market movements where altcoins have started outperforming Bitcoin, indicating a build-up of momentum that could result in significant gains.
Macroeconomic Factors Boosting Crypto Optimism
Thielen refers to this potential rally as the “Santa Claus squeeze,” drawing parallels to the seasonal rally seen in equity markets. He notes that historically, Bitcoin has experienced an average rally of 23% during the festive months of November and December. Additionally, recent performance where alternative cryptocurrencies have outperformed Bitcoin further supports the forecast of a year-end rally.
Thielen also highlights several macroeconomic indicators that contribute to this optimistic outlook. The US Treasury’s decision to slow down issuing longer-dated debt implies expectations of declining interest rates, which historically benefit growth assets like tech stocks and digital currencies. Federal Reserve Chair Jerome Powell’s dovish tone at the post-FOMC meeting press conference, along with a weakening labor market, further suggests a halt in rate hikes and potential cuts in 2024.
Potential Rally for Bitcoin and Ethereum
Thielen draws parallels to Bitcoin’s response at the end of the last Fed rate hike cycle in January 2019, which resulted in a 400% price rally. While he doesn’t expect such dramatic gains this time, he anticipates considerable growth for Bitcoin and other altcoins he refers to as “higher beta crypto assets.” He also mentions the potential approval of a BlackRock spot Bitcoin ETF as a catalyst for a broader crypto rally.
In another report, Thielen notes the Ethereum ecosystem’s signs of recovery, including increasing revenues and ETH’s ability to hold the crucial support level of $1,550. Ethereum and other altcoins have been outshining Bitcoin, with growing market dominance and trading volumes. The perpetual futures funding rate for both Bitcoin and Ethereum is also rising, indicating a more confident stance among traders.
Hot Take: Potential Year-End Rally Could Bring Holiday Cheer to Crypto Investors
As we approach the holiday season, crypto investors have reason to be optimistic about a potential year-end rally. Markus Thielen’s analysis suggests that Bitcoin may lead the charge, supported by recent market movements and macroeconomic indicators. With historical data showing Bitcoin’s tendency to rally during November and December, coupled with altcoins outperforming Bitcoin, there is a possibility of significant gains in the crypto market.
The positive outlook extends beyond Bitcoin, with signs of recovery in the Ethereum ecosystem and increasing market dominance for altcoins. Additionally, the potential approval of a BlackRock spot Bitcoin ETF could act as a catalyst for a broader crypto rally. As always, it’s important to keep an eye on market trends and news developments to make informed investment decisions during this potentially festive time in the crypto market.
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