Bitcoin’s price cooled at $41,800, down 4% this week and on track to snap the first eight-week streak of gains since 2017.
Investors moved a net $860 million of BTC to exchanges, signaling profit-taking, IntoTheBlock noted.
BTC to hit $75,000 early 2024 as U.S. spot bitcoin ETF approval and halving narratives combine, WOO Network predicted.
Bitcoin’s (BTC) rally stalled, putting it on track to snap a historic eight-week streak of gains as its price remained muted at around $42,000 as of Friday.
The largest cryptocurrency by market cap recovered to $43,000 after Monday’s 10% flash crash to $40,000 that flushed overenthusiastic leveraged bets on higher prices. A dovish Federal Reserve projecting rate cuts and the falling U.S. dollar bolstered the recovery, but lost steam by Friday and BTC slipped back to $41,500.
On-chain data indicates significant profit-taking behind the stalling prices. Bitcoin saw $860 million of net inflows into crypto exchanges during the week, the highest level since March, analytics firm IntoTheBlock noted Friday. Moving assets to exchanges usually signals an intention to sell, indicating that many investors decided to take some profits after bitcoin’s 65% rally from $27,000 in October.
If BTC were to finish the week below $43,800, it would end an eight-week streak of gains, the longest winning streak since April to June 2017, according to TradingView historical data.
BTC was changing hands at around $42,000 at press time, down almost 4% since the start of the week.
Experts predict BTC all-time high prices for next year
The recent dip in price is likely just a blip on the radar, as bitcoin is primed for a strong 2024 with multiple investment narratives supporting rising prices, experts argued.
“I do think this kind of trading is normal,” Craig Erlam, senior market analyst at OANDA, said in an interview with CoinDesk TV on Friday. “If you look at other asset classes, things don’t move in straight lines.”
Market participants expect interest rates to fall “aggressively” in the U.S., U.K. and Europe for the next couple of years, which is more beneficial for risky assets compared to the past 18 months of rising rates, Erlam explained. The Dow Jones Industrial Average hitting an all-time high this week underscored the improvement in investors’ risk-appetite, he added.
“To take a breather and define a new range can be seen as a healthy sign,” Anthony Rousseau, head of brokerage solutions at TradeStation, said in an emailed note.
He said the Federal Reserve hinting at easing monetary policy and cutting rates next year injected a “windfall of confidence” in risk assets like crypto, but the more prevalent theme is still an increasingly anticipated U.S. regulatory approval for spot bitcoin exchange-traded funds (ETFs) by BlackRock and others, and the fresh demand for BTC they would unleash.
Meanwhile, long-term holders – or HODLers, who hold on to their assets for at least a year without moving – haven’t started selling despite the short-term profit-taking, Rousseau noted, making bitcoin’s supply increasingly restricted.
“It’s possible we have the perfect storm brewing for a strong 2024, with the possibility of closing in on all-time highs by the end of 2024,” he said.
All-time highs could come even sooner, crypto trading platform WOO Network predicted, as spot ETF listings and bitcoin’s upcoming halving in April, which will slash new BTC issuance by half, may create an enticing narrative combination.
“We targeted $75k for BTC in early 2024 and believe demand will increase heavily as the ETF and halving narratives combine, leading BTC to develop an additional narrative as a safe haven asset ,” WOO Network’s year-end report said.
Bitcoin has been on a historic winning streak, with many investors reaping significant rewards from the cryptocurrency’s meteoric rise. However, the future of Bitcoin is now at a crossroads, with the potential for a downturn in the near term. Despite this, experts believe that a ‘perfect storm’ is brewing for a strong 2024, which could signal another period of significant growth for Bitcoin.
The Current State of Bitcoin
As of right now, Bitcoin is facing some headwinds that may put its historic winning streak at risk. The cryptocurrency has experienced a significant drop in value in recent weeks, signaling a potential shift in market sentiment. Additionally, regulatory crackdowns in various countries have put pressure on Bitcoin and other cryptocurrencies, making it more difficult for them to operate in certain jurisdictions.
Moreover, the ongoing environmental concerns surrounding Bitcoin’s energy consumption have also contributed to the recent downturn. Institutions and individual investors alike are increasingly wary of the environmental impact of Bitcoin mining, which has led to a sell-off of the cryptocurrency.
The Perfect Storm for 2024
Despite these challenges, experts believe that Bitcoin is poised for a strong comeback in 2024. Several factors are converging to create a ‘perfect storm’ for the cryptocurrency, which could result in another period of significant growth and value appreciation.
- Adoption by Major Institutions: Major financial institutions and corporations are increasingly embracing Bitcoin and other cryptocurrencies. This adoption is expected to continue to grow over the next few years, providing a strong foundation for Bitcoin’s future growth.
- Technology Improvements: The underlying technology behind Bitcoin continues to evolve, with ongoing improvements to scalability, security, and accessibility. These advancements will make Bitcoin more user-friendly and secure, attracting new investors and users.
- Market Maturity: As the cryptocurrency market continues to mature, Bitcoin is expected to become more stable and less susceptible to wild price fluctuations. This increased stability will make Bitcoin a more attractive investment for institutional and retail investors alike.
Practical Tips for Bitcoin Investors
For investors interested in Bitcoin, it’s important to approach the cryptocurrency with caution and diligence. Here are some practical tips for navigating the current market:
- Stay Informed: Keep up to date with the latest news and developments in the cryptocurrency market, including regulatory changes, technological advancements, and market trends.
- Diversify Your Portfolio: Don’t put all of your investment eggs in one basket. Consider diversifying your portfolio with a mix of cryptocurrencies, stocks, and other assets to spread risk.
- Consider Long-term Holding: If you believe in the long-term potential of Bitcoin, consider holding onto your investment through periods of volatility. Short-term market fluctuations may not have a significant impact on the cryptocurrency’s future value.
Case Study: Bitcoin’s Performance in 2017
A relevant case study on Bitcoin’s performance in 2017 can provide valuable insights for investors. In 2017, Bitcoin experienced a significant rally, reaching an all-time high price of nearly $20,000. However, the cryptocurrency subsequently experienced a major correction, with its price dropping by over 80% in the following months. Despite this downturn, Bitcoin eventually recovered and reached new all-time highs in subsequent years.
This case study illustrates the potential for significant short-term volatility in Bitcoin’s price, but it also underscores the cryptocurrency’s ability to recover and thrive over the long term.
First-hand Experience: Navigating Bitcoin’s Volatility
As an investor who has navigated Bitcoin’s volatility, I can attest to the challenges and rewards of investing in the cryptocurrency. While it can be a rollercoaster ride at times, I have found that taking a long-term perspective and staying informed about market developments has been crucial to my success as a Bitcoin investor.
Ultimately, Bitcoin’s future is bright, despite the current headwinds it faces. The ‘perfect storm’ brewing for 2024 could signal another period of significant growth and value appreciation for the cryptocurrency. By staying informed, diversifying your portfolio, and taking a long-term perspective, you can position yourself to reap the rewards of Bitcoin’s future success.
“Interesting to see how the perfect storm will play out for Bitcoin in 2024.”