For its more speculative enthusiasts, Bitcoin is delivering an early Christmas by racing beyond the $40,000 threshold and showing strong upward momentum. The rally has helped the market to distance itself from the challenges of the crypto winter in 2022. Yet, it’s essential to note that Bitcoin began the year with a precarious start, initially trading at a modest level of $16,500.
Experts now believe the premier crypto asset is sitting at a crucial level, which might serve as the new starting point for the upcoming bull market.
$40k Starting Point for Bitcoin Bull Market?
In a statement to CryptoPotato, Ryan Lee, Chief Analyst of Bitget Research, said that the anticipation of interest rate cuts by the Federal Reserve has propelled commodity prices higher at the macro level, with gold hitting historic highs and Bitcoin rebounding by nearly $15,000 over the past month.
With concerns about a potential US economic recession, Lee said the fund managers are predicting an 80% consensus level for a trend of interest rate reduction in 2024. This level of consensus is the highest ever recorded. The positive news has already been factored into the cryptocurrency market.
“In the crypto market, Bitcoin has surpassed $40,000 without encountering significant resistance. Within 24 hours, short positions on Bitcoin contracts worth $54 million were liquidated, significantly weakening the bearish forces.
The market may undergo an overall accelerated upward revision. Furthermore, a new asset category within the Bitcoin ecosystem, ORDI, surged over the weekend, indicating a strong speculative sentiment in the market.”
“Earned” Growth in Bitcoin’s Current Rally
Elitsa Taskova, Chief Product Officer of Nexo, also highlighted the significant changes in Bitcoin’s current surge past $40,000 compared to almost two years ago. Unlike the rapid increase during the last bull market, this growth feels more “earned” and has been a steady ascent to the current plateau.
The consensus is that Bitcoin holding at $40,000 is no surprise, and there’s optimism for further increases following consolidation around the $41-43K range.
Taskova also noted the interesting parallel of Bitcoin reaching yearly highs while gold is also breaking out. This suggests both assets are serving as hedges or uncorrelated assets less influenced by stock market fluctuations.
With strong macroeconomic forces, increased institutional adoption, and growing interest over the past year, Bitcoin seems well-positioned into 2024. Additionally, global regulatory developments support its trajectory. The Nexo exec believes the best outcome for the market will be steady growth, allowing Bitcoin and other crypto assets to rise sustainably, in contrast to the volatility seen in previous cycles.
State of Market Post Bitcoin Spot ETF Approval in US
The crypto market is at the cusp of a pivotal moment with significant events on the horizon, including the potential approval of a spot Bitcoin exchange-traded fund (ETF). The latest rally is closely tied to expectations regarding the Spot Bitcoin ETF.
Weighing on the market status post approval of such a fund in the US, Davinder Singh, Chief Technology Officer at RocketX Exchange, predicted a slight dip, setting the stage for a potential climb to new peaks.
“Bitcoin’s price surge is intricately linked to the outlook for the Spot Bitcoin ETF. With a prevailing belief that it might secure approval in the initial stages of Q1, an air of optimism envelops the market, fueling the current upward trajectory. Following the anticipated approval, a slight dip is foreseen, setting the stage for a potential climb to new peaks.”
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