For the past year another bullish cycle was incepted in BTC. Once again, it started from the key support zone, which represents miners' breakeven price. The strong bullish market sentiment last year was supported by a risk-on environment in financial markets:
All this provided favorable liquidity conditions in the markets, setting the stage to propel the crypto market. Now that BTC has reached an all-time high (ATH), and on-chain metrics look very strong according to Glassnode, the question remains: will this bullish cycle follow the same pattern as after previous BTC halvings, or will it be somewhat different? As for now I see the following possibilities:
Best-case:
Confidence: 69%
Description: BTC will continue ongoing bullish cycle as during the past cycles. However investors should be aware of the possibility of temporary consolidation before ATH break out (similar to what we saw in spring-summer 2023 before last autumn bull-run).
Min pull-back price: ~50K$
Max target price: >130K$
Base-case:
Confidence: 21%
Description: False ATH breakout will provoke a deeper pull-back before continuation of bullish cycle. In case the price starts sliding down, investors should check how the market reacts on the 50K price zone. Market inability to break ATH after such consolidation, will provoke a deeper pull-back.
Min pull-back price: ~35K$
Max Target price: ~100K$
Worst-case:
Confidence: 10%
Description: False ATH breakout will provoke strong bearish trend to last year low and miners breakeven price range. This will require a black-swan event and rapid deteoration of financial market's sentiment. This is very unlikely because the US government will try all possible means to keep markets strong before the POTUS election.
Min pull-back price: ~20-25K$
Max Target price: ~80K$
Conclusion:
The best-case scenario looks the most probable (69%), there are some factors which may come into play in the foreseeable future and enact downward price pressure:
So there is a slight chance (21%) that the market might behave differently than past bull cycles. Over the course of the year I will continue posting updates on whether the market confirms this outlook, and I'll keep you updated throughout the year if the alternative scenarios unfold.
- Supressed dollar sterngth, decreasing oil and gas prices
- Increasing buybacks in the US corporate sector
- Strong results of the "magnificent seven" and anticipation of the AI revolution
- Fed provided liquidity to mitigate the consequences of the SVB collapse, and decreased the rate of quantitative tightening (QT)
All this provided favorable liquidity conditions in the markets, setting the stage to propel the crypto market. Now that BTC has reached an all-time high (ATH), and on-chain metrics look very strong according to Glassnode, the question remains: will this bullish cycle follow the same pattern as after previous BTC halvings, or will it be somewhat different? As for now I see the following possibilities:
Best-case:
Confidence: 69%
Description: BTC will continue ongoing bullish cycle as during the past cycles. However investors should be aware of the possibility of temporary consolidation before ATH break out (similar to what we saw in spring-summer 2023 before last autumn bull-run).
Min pull-back price: ~50K$
Max target price: >130K$
Base-case:
Confidence: 21%
Description: False ATH breakout will provoke a deeper pull-back before continuation of bullish cycle. In case the price starts sliding down, investors should check how the market reacts on the 50K price zone. Market inability to break ATH after such consolidation, will provoke a deeper pull-back.
Min pull-back price: ~35K$
Max Target price: ~100K$
Worst-case:
Confidence: 10%
Description: False ATH breakout will provoke strong bearish trend to last year low and miners breakeven price range. This will require a black-swan event and rapid deteoration of financial market's sentiment. This is very unlikely because the US government will try all possible means to keep markets strong before the POTUS election.
Min pull-back price: ~20-25K$
Max Target price: ~80K$
Conclusion:
The best-case scenario looks the most probable (69%), there are some factors which may come into play in the foreseeable future and enact downward price pressure:
- Having BTC and ETH ETFs approved, investors and traders might follow a psychological pattern of selling the news.
- This could be exacerbated this autumn by tighter monetary conditions due to a prolonged period of high rates before the Fed is forced to start easing despite sticky inflation.
- Additionally, the BTC halving event might produce a lesser impact during this cycle, as newly mined coins will constitute only a minor share of coins already in circulation.
So there is a slight chance (21%) that the market might behave differently than past bull cycles. Over the course of the year I will continue posting updates on whether the market confirms this outlook, and I'll keep you updated throughout the year if the alternative scenarios unfold.
As expected in Best-case and Base-case scenarios, we are entering a phase of longer consolidation similar to the summer of 2023. For best-case scenario to be cancelled, we need to see price action result in 50-60K$ range. This is a very strong support zone, which signifies maximum possible pull back within a long-term trend started in Nov 2022.
Only in case demand in 50-60K$ range will be insufficient to incept an impulse that will break ATH, the probability of Base-case and Worst-case scenarios will be increased significantly.