Bitcoin Price Surges Above $45,000
On January 1, the price of Bitcoin (BTC) experienced a strong rebound, gaining over 7% and surpassing the $45,000 mark. Many are eagerly awaiting the potential approval of a Bitcoin exchange-traded fund (ETF), which is expected to happen by January 10.
Bullish Outlook and Altcoin Season
A recent report from Matrixport suggests that the high Bitcoin funding rate indicates that crypto traders remain optimistic and anticipate the approval of a Bitcoin ETF. With the Bitcoin dominance indicator dropping to 50.3%, there are signs that an altcoin season may be on the horizon, driving the entire crypto market forward.
Although Tether minting activities, an indicator of fiat-to-crypto inflows, have not increased, the ongoing price rally suggests a scarcity of sellers in the market, leading to higher prices. Currently, the funding rate has reached a new high of +66%, meaning that long positions pay shorts an annual rate of 66% to maintain their positions.
Predictions for Bitcoin Price
This dynamic in the futures market squeezing the spot market is expected to push Bitcoin beyond the $50,000 target level for January 2024. In fact, there is speculation that Bitcoin could even surpass $50,000 by the end of this week.
Increase in BTC Miner Activity
Looking ahead, some market analysts are already considering the Bitcoin halving event scheduled for April 2024. They believe that the upcoming ETF approval could result in a sell-the-news event. BTC miner activity has recently surged over the past week.
Bitcoin miners absolutely EXPLODED higher in the 8 days following this tweet.
Contrary to popular opinion, Wall Street does not know everything.
Importantly, Wall Street still has not priced in $60,000 or $100,000 Bitcoin yet.
The big move in miners hasn’t even begun. Breathe.
— Mike Alfred (@mikealfred) January 1, 2024
According to the Matrixport report, Bitcoin mining companies are strategically limiting supply around the upcoming halving cycles expected in April 2024. This move could contribute to a potential supply shortage in the market. The report suggests that this could lead to a surprising surge in Bitcoin prices in the coming year.
Matrixport highlights historical trends showing strong BTC rallies during halving cycles, coinciding with US election years. The average return for BTC during the years 2020, 2016, and 2012 was an impressive +192%. The report speculates that this pattern could drive Bitcoin toward the previously set target of $125,000, which was established based on Matrixport’s ‘one-year-new-high’ indicator. The report also draws a parallel to the strong performance of US stocks during election years since 1960.
Hot Take: Potential for a Bullish Year Ahead
Based on recent developments and market indicators, it seems that Bitcoin has started the year on a strong note. The rebound in price and anticipation of a Bitcoin ETF approval suggest a positive outlook for the cryptocurrency. Additionally, the increase in BTC miner activity and strategic supply limitations further contribute to the potential for a bullish year ahead.
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