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Bitcoin Price Rebounds Above $38k: What Can We Expect Next for BTC?

Bitcoin Price Rebounds Above $38k: What Can We Expect Next for BTC?

Bitcoin Bounces Back Above $38k After Brief Dip

Bitcoin has demonstrated its resiliency by quickly bouncing back above the $38,000 threshold after briefly dipping below $37,000. This recovery comes after last week’s turmoil surrounding crypto exchange enforcement actions.

Key Points:

  • The bullish sentiment is driven by the upcoming 2024 halving event and the belief that the $35,000 level will hold as new support.
  • On-chain data indicates that most holders are no longer panic selling at a loss, suggesting that market bottoms have been reached.
  • Analysts predict that Bitcoin could reach $100,000 by the end of 2024, driven by spot ETF approvals.
  • Bloomberg experts forecast a high chance of the SEC approving Bitcoin spot ETFs by January 2024.

This display of stability has restored confidence for investors as Bitcoin shows strength heading into potential macro catalysts that could push prices to new all-time highs in 2024.

Anticipation of Supply Squeeze

Bitcoin appears to be anticipating its next supply squeeze as the block reward halving approaches in mid-April 2024. Historical data suggests that the year leading into halvings produces significant price increases.

Previous cycles have shown that Bitcoin’s price ranges from 2x to 10x in USD terms from one year prior to the halving date. The current cycle’s timing places prices in the middle of what could be an explosive run-up based on historical patterns.

Sentiment Shift and Fundamental Backdrop

In addition to the programmed supply cuts, Bitcoin benefits from being seen as a hedge against inflation and currency debasement. The Federal Reserve’s potential rate cuts in mid-2023 and early signs of disinflation create a favorable environment for alternatives to fiat currency like Bitcoin.

Despite gloomy economic projections, many analysts believe that Bitcoin still has room to grow after lagging behind most risk-on rebounds so far. The creator of Bitcoin’s stock-to-flow model predicts that prices will never dip below $35,000 and maintains a year-end 2023 target of $100,000 per BTC.

Standard Chartered, a Wall Street investment bank, also forecasts a six-figure price for Bitcoin by the end of 2024. The main driver for this prediction is the expected approval of a spot Bitcoin ETF in the US during Q1 2024.

Supportive On-Chain Metrics

On-chain activity shows that there has been capitulation and an exhaustion of willing sellers following the FTX debacle. Outflows from exchanges have exceeded inflows since the bankruptcy, indicating a strong desire to accumulate and hold BTC for longer periods.

The SOPR indicator, which tracks whether coins are spent at a profit or loss, has decreased as overleveraged traders experienced realized losses when liquidated on FTX. This purge of weak hands allows more long-term buyers to enter the market.

Hot Take: Bitcoin Poised for New Highs

With positive catalysts aligning as Bitcoin enters its historic boom phase around the halving, it seems likely that BTC will reclaim its former highs and potentially reach $100,000 within the next year. However, volatility will continue to be part of the journey.

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Bitcoin Price Rebounds Above $38k: What Can We Expect Next for BTC?