The hawkish shift in the market sentiment could dampen the demand for risk assets, including cryptocurrencies and technology stocks.
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History Favors Bitcoin Bulls Despite Crypto Hedge Funds Increasing Shorts
Bitcoin may be dripping lower at spot rates. Still, one analyst is unfazed, expecting the coin to reverse recent losses and snap up firmly before peaking in December 2024. At spot rates, BTC is down roughly 11% from 2024 peaks and struggling to generate sufficient buying pressure, looking at the formation in the daily chart.
Will History Support Bitcoin And Rally To Fresh Highs?
Taking to X, the analyst highlights historical price patterns using the 2-week Fisher Transform indicator, a tool for picking out potential reversal zones like double tops or bottoms. Though the technical indicator lags, it has accurately picked out peaks in the past.
In 2021, when Bitcoin soared to over $69,000, the Fisher Transfer indicator printed a signal, highlighting potential peaks. In the coming weeks following this signal, prices crashed.
By the end of 2022, Bitcoin had fallen to as low as $16,000, accelerated by the collapse of FTX and the bankruptcy of several other popular crypto hedge funds, including Three Arrow Capital (3AC).
The analyst also emphasizes the importance of the indicator in differentiating between a double top, mirroring 2017 and 2021, and a potential single peak later this year.
Presently, the trader said prices are approaching 2017 levels. Then, prices created what the analyst described as a “more subtle initial rise” before peaking six months later at over $20,000.
If this leads, and the indicator “pauses” where it is, Bitcoin will likely record a “single top.” However, only time will tell where this top will be at.
Hedge Funds Were Selling At Tops?
This prediction comes amid significant bearish bets by leveraged hedge funds. Data from the United States Commodities Futures Trading Commission (CFTC) reveals that these funds held record “short” positions in Bitcoin futures contracts by last week.
Observers note this was the largest short position since 2017, at over 16,000 contracts. By shorting, they expected prices to dump, which is precisely what’s happening at spot rates.
However, even as hedge funds short, another analyst, responding to the trend, said the futures premium remained high. This is a development that some of these crypto hedge funds are taking advantage of.
The number of shorts could increase in the days ahead as United States Federal Reserve officials appeared to be hawkish and upbeat economic data started pouring in. Being a data-driven central bank, the Federal Reserve might not slash rates as fast as initially projected.
Bitcoin Resurgence: Analyst Foresees $69,000 Target In Near Term
Crypto Jelle, a cryptocurrency analyst and aficionado, has expressed optimism toward the price action of Bitcoin, highlighting the potential for the digital asset to revisit the $69,000 threshold in the short term.
Bitcoin Poised For Short-Term Gains
Due to waning interest in the cryptocurrency market, the price of Bitcoin fell by 5.60% to $66,650. However, the latest price decline does not seem to have dampened traders’ and analysts’ expectations for a sustained bull run, and one of those is analyst Crypto Jelle.
Crypto Jelle advocates for the largest crypto asset noting that although Bitcoin did not break $69,000 in one go, it appears that it is making a new higher low at this point. He believes that the coin could reach the aforementioned price again soon, urging investors to hold around the $66,500 price level. Thus, he advises the crypto community and traders to be patient, since the much-anticipated Bitcoin halving is approaching quickly.
Jelle underscored that new all-time highs for Bitcoin do not happen in one go. According to the analyst, every ATH breakout over the past years was preceded by a chopping period. As a result, a large number of people tend to lose hope in the crypto asset, prompting them not to invest in BTC. Given the recent performance of BTC, Jelle claims, we are witnessing the same thing occur once more.
Drawing attention to a bullish pennant formation, Jelle stated that Bitcoin currently appears to be getting ready to break out of this area. This is due to a strong bounce from the 4-hour Exponential Moving Average (EMA) 200, and now reaching an even higher low. Based on the development, the crypto expert anticipates the breakout to take place in the upcoming weeks.
Within the next 15 days, the Bitcoin halving event has been slated to commence. Given its past impact on BTC’s price, Crypto Jelle’s prediction could come to pass more quickly than anticipated.
Two Events Aside from Halving Considered To Boost BTC’s Price This Year
While the community is hoping for the halving event to improve prices, Lark Davis, a crypto expert has pointed out two other events that could impact the asset significantly, affirming a bullish year for BTC.
These include the United States elections scheduled to happen in November, and the Federal Reserve interest rate cuts. According to Davis, these events are equally as important as the halving event as they will propel the bull market even further.
With the stock market performing traditionally well, around 83% during an election, and Bitcoin being part of Wall Street, BTC is expected to rise. Davis then mentioned the three rate decreases that Goldman Sachs said would occur in 2024, starting in June.
It is worth noting Goldman Sachs predicts that the terminal interest rates will fall between 3.25% and 3.5%. Davis believes these reductions will increase market liquidity and encourage investors to invest more in cryptocurrency assets.
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Bitcoin Pre-Halving Dip Expected: Will BTC Rally Before US Fed Decision?
Bitcoin remains under pressure when writing and is within a bearish formation following sharp losses on March 19. While prices tank, one analyst on X thinks this retracement aligns with historical performance, especially as the network prepares to slash miner rewards in April 2024.
Bitcoin Retracement Similar To Pre-Halving Cool-Off Of 2020
Based on the analyst’s assessment, BTC is currently down roughly 18% from its recent swing high. This retracement is at the same level as the ballpark 19% decline observed before the previous halving event in 2020.
It’s worth noting that Bitcoin has historically corrected lower after posting fresh highs before halving. Afterward, the coin rallies to fresh all-time highs following halving, driven by a decrease in supply. In this cycle, BTC soared to a new all-time high of $73,800 in the first two weeks of March before cooling off to spot rate, a deviation from the usual trend.
As the Bitcoin network gears up for the halving event in mid-April 2024, it’s crucial to note the potential market implications. Some market observers speculate that the current drop could offer entries for investors looking to accumulate at a lower price in anticipation of future price gains.
From the Bitcoin candlestick arrangement in the daily chart, the least resistance path appears southwards. Specifically, following the dip on March 19, the coin remains in a bearish breakout pattern, finding strong rejections from the middle Bollinger Band (BB) or the 20-day moving average. The BB is a technical indicator for gauging volatility.
Will The Federal Reserve Revive BTC Demand?
Currently, Bitcoin is steady. Even so, only time will tell whether prices will recover, breaking above the $70,000 level in the days leading up to the halving event in less than a month. Further losses from spot rates mean the dip before halving and after the pre-halving rally was much sharper than in 2020.
As history clearly shows, halving is an important event in Bitcoin. It has repeatedly proven to be a major price catalyst for Bitcoin, as seen in the last bull cycle when prices rose to roughly $70,000.
Accordingly, the coming days will shape how Bitcoin prices evolve in the medium to long term. One key driver of crypto and BTC valuation will be fundamental events, especially pronouncements from the United States Federal Reserve (Fed). The central bank will relay its decision on interest rates on March 20. Earlier in 2022, when interest rates were hiked, prices tanked.
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The Bitcoin “Big Money Algos” Are Here: Will BTC Breach $70,000?
Mike Alfred, a Bitcoin investor and crypto commentator, thinks the “big money algos” are back and predicts the world’s most valuable cryptocurrency will rally to record fresh February 2024 highs but retest all-time highs. This uptick, Alfred says, is before the network finally halves its miner rewards.
The “Big Money Algos” As BTC Retests $53,000
Taking to X on February 20, the investor notes that “big money algos just flipped on” and that the uptrend remains. By the time Alfred posted on X, BTC was headed towards the $53,000 before slipping back slightly to around the $59,000 level.
However, the uptrend remains when looking at the candlestick arrangement in the daily chart. Bitcoin has been increasing, defying gravity for the better part of February. At spot rates, analysts, including Alfred, expect the coin to push higher, breaking above $53,000, a stubborn resistance level. If this happens, and considering the sharp breakout, it is likely that buyers will push prices higher towards $60,000 and potentially towards $70,000, as the investor predicts.
Even so, it remains to be seen whether the uptrend will be sustained. When writing, the breakout has been met with solid rejection. Notably, there appear to be “sell walls,” which are large sell orders parked at around $53,000. Still, optimistic bulls expect a triumph, marked by a comprehensive close above this psychological round number.
The crypto community, including the investors, is bullish on Bitcoin. So far, anticipation has been building up for even more gains ahead of halving. Bitcoin halving, an event set at the protocol level, will half miner rewards, possibly inducing a supply shock, assuming the current demand increases.
Presently, Bitcoin supporters believe the network will continue to find more adoption as a medium of exchange and a store of value. With the coin becoming deflationary after halving, the consensus is that prices, guided by historical performance, will rise.
Bitcoin Traders Are Bullish As Billions Flow To The Industry
While optimism reigns, Bitcoin remains volatile despite recent institutional participation. Through the spot Bitcoin exchange-traded funds (ETFs), Wall Street players have found a regulated product to channel billions into Bitcoin, reading from the amount of coins scooped in the recent past.
Still, whether the uptrend will continue depends on other macro factors, including monetary policy status in the United States. In March, the United States Federal Reserve (Fed) will guide the interest rate regime. It is a decision that may lift BTC to new levels as a store-of-value asset or force prices lower as capital rotates that to the greenback.
Feature image from Shutterstock, chart from TradingView
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