2023-04-24 15:21:07
Cryptocurrency winter over: Bitcoin nearing $100,000 next year?
Standard Chartered said on Monday that Bitcoin, the largest cryptocurrency, might reach $100,000 by the end of 2024, and that the so-called “crypto winter” is over.
Jeff Kendrick, Director of Digital Asset Research at Standard Chartered, explained in a note that Bitcoin might benefit from factors including the recent turmoil in the banking sector, and the stability of risk assets when the Federal Reserve (the US central bank) stops the cycle of raising interest rates and improves Profits from mining digital currencies.
“While sources of uncertainty remain, we believe the path to the $100,000 level is becoming clearer,” Kendrick wrote.
Bitcoin has soared this year, rising above $30,000 in April for the first time in 10 months. These gains represent a partial recovery following the cryptocurrency sector lost trillions of dollars in 2022, when central banks raised interest rates and a group of companies operating in this field collapsed.
A Citi analyst said in November 2020 that Bitcoin might jump to $318,000 by the end of 2022, but it ended last year down regarding 65 percent to $16,500.
What do the analyzes say?
“Forbes” magazine explains that the price of bitcoin exceeded $30,000 during the past week, its highest level since June of last year, but it fell once more although analysts considered it the beginning of a new “crypto cycle”, and the founder of Ethereum issued an expectation upwards for prices.
“Reserve risk is above zero once more. This Bitcoin indicator indicates huge potential,” Bitcoin and cryptocurrency analyst Ali Martinez tweeted, along with a chart of Glassnode data showing that the price of Bitcoin exceeds this level for the first time since late 2021.
“When bitcoin reserve risk moves above zero, it indicates parabolic price movements,” Martinez said, referring to historical data in 2012, 2013, 2015, 2019 and 2020. However, the Bitcoin price action so far this week has eroded traders’ confidence.
“The market is struggling to find a reason to buy and support the price as profit-taking and long liquidation pressures have pushed the price lower this week, while the US stock market is losing direction,” Yuya Hasegawa, cryptocurrency market analyst at BeBank, said in an email to Forbes.
“Unfortunately, despite the pullback, the bulls do not seem to have given up so far because the funding rate of the Bitcoin futures market is still positive, which may limit the higher potential of Bitcoin and increase the decline in the short term.”
Meanwhile, Ethereum’s upgrade in Shanghai earlier this month, the final part of its transition to a full proof-of-stake network, raised expectations that the network might see a surge of interest from new investors.
In a report this week, Bendik Shay, head of research at research firm K33, described Ethereum’s institutional activity as an “explosion,” adding, “The market overestimated the selling pressure in Shanghai, prompting Ethereum to outpace Bitcoin.”
Where are the markets headed?
Cryptocurrency site Fxstreet notes that the end of the hash rate wars in 2018 led to the collapse of the bitcoin price from regarding $6,000 to $3,000. This sudden drop marked a new low for Bitcoin. After that, the price of Bitcoin increased by 173% in the next two months to $13,880.
In the year 2023, a similar setup was formed, which indicates that continuous spinning is likely to lead to a similar look. While a rise of 173% is unlikely, investors can expect Bitcoin to rise to $41,273.
The site pointed out two possible scenarios, a continuous upward trend to $35,260 and $41,273, or a correction to two crucial levels at $25,205 and $24,303, followed by a rise to the $35,260 and $41,273 levels. The second scenario will allow marginal buyers the opportunity to accumulate Bitcoin.
As for the specialized site “Finbold”, it considers that the bearish price movement of Bitcoin has stopped, as the cryptocurrency aims to establish a solid foundation above the $27,000 position. This comes just days following it failed to sustain gains above $30,000.
Despite the economic downturn, crypto analyst El_crypto_prof indicated in a tweet dated April 23 that the losses might be short-lived. According to the analyst, the historical data points to a possible rally in Bitcoin, following what he called the end of the smart money accumulation.
Elsewhere, cryptocurrency trading expert and analyst Michael Van de Poppe noted that Bitcoin still faces crucial resistance at $27,800. “Bitcoin still faces crucial resistance at $27,800. One more test lower will diverge to the upside and open up opportunities for a long-term play towards $28,700.”
Meanwhile, as Finbold previously reported, Bloomberg’s chief commodity strategist, Mike McLone, predicted that Bitcoin would likely see a short-term pullback following dropping below $30,000. However, he remains optimistic regarding the long-term outlook.
Bitcoin’s latest correction occurred shortly following it crossed $30,000 for the first time in regarding 10 months. The rally was attributed to Bitcoin benefiting from the banking sector crisis in the United States and the optimism surrounding the Federal Reserve’s stance on inflation.
This correction led Bitcoin to lead the broader market in short-term losses partly in reaction to higher inflation data in the UK. This development sparked concerns regarding higher interest rates for a longer period, which contributed to the selling of Bitcoin and other risky assets.
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