This bull market is cyclical in nature, and these seven signals suggest it's just beginning.
Just three weeks ago, on February 12, the price of Bitcoin crossed the $50,000 threshold. “There's certainly some room for this rally in the short term,” said Sean Farrell, head of digital strategy at Fundstrat Global Advisors.
He was right!
The cryptocurrency exchange's spot rally soared to just over $70,000 on Friday, March 5, before returning to current levels. So after crossing $50,000, the rally certainly had some room.
But even after recovering to all-time highs for the first time in less than two-and-a-half years, here are eight signs the stock still has room to rise.
1. Fed interest rates haven't come down yet.
Bitcoin prices are at new all-time highs, and the federal funds rate for borrowing US dollars has not yet begun to fall. The last time Bitcoin prices were this high, dollar supply was at high tide and the Fed kept interest rates low. This time, it was achieved without low interest rates.
James Butterfill, head of research at digital asset management firm CoinShares, recently told ABC News: “The spike in prices coincides with a period of high interest rates, and the surge in demand is due to an overabundance in search of a landing spot.'' “This suggests that there is very little to do with cash.” ”
When this situation changes, perhaps in 2024, Bitcoin will become a huge source of demand for cryptocurrencies, with deflationary protections from the Federal Reserve becoming a huge source of demand for cryptocurrencies, and tech stocks benefiting from excess cash and cheap borrowing from low interest rates. You will enjoy the same investment stimulus that you have. Interest rate system.
2. BTC’s first $20,000 monthly candle
Bitcoin hit its first-ever monthly $20,000 candlestick in February, an encouraging milestone and a sign of potentially steeper price movements in the future.
As a result, one of Glassnode's lead on-chain analysts: I have written“Unreal… In February 2024, a $19.84,000 #Bitcoin candlestick was printed, the largest monthly USD increase in history. This increased #Bitcoin’s market cap by $390 billion. We did…an astonishing 47% increase.”
3. Bitcoin trading declines over the weekend
According to a late February report from crypto data analysis firm Kaiko Research, weekend crypto trading continues to decline as a percentage of weekly trading volume.
“However, this trend has been going on for a long time. The proportion of BTC traded on weekends has declined significantly over the past six years, dropping from 24% in 2018 to just 17% in 2023.”
This likely indicates increased acceptance and use of cryptocurrencies by institutions operating during business hours, Monday through Friday.
This trend will continue into 2024.
“So far in 2024, only 13% of all BTC trades from January 1st to February 20th have been executed on weekends. Breaking this down by region, weekend trades are more likely to be offshore transactions. and the exchanges available in the United States.”
The decline from 17% to 13% shows the significant impact Spot Bitcoin Exchange Traded Funds (ETFs) have had on the market.
4. Rally overheated Coinbase (sorry)
You know that when the halving hasn't happened yet and the volume melts Coinbase, the price increase for Bitcoin will be sudden. The San Francisco-based cryptocurrency exchange shut down at the end of February as the cryptocurrency market heated up.
The exchange went down after being unable to handle a large number of requests. As a result, due to a technical glitch, account owners were notified that their account balance was zero.
CEO Brian Armstrong posted:
“The app is currently recovering. We modeled and load tested up to 10x spikes in traffic. This exceeded that number. It's expensive to keep overprovisioning the service. But we need to continue working on autoscaling solutions to eliminate any remaining bottlenecks.”
The outage occurred shortly after Bitcoin prices topped $60,000 on the exchange, its highest since 2021. Bitcoin lost about $2,800 in value after news of the Coinbase outage began spreading on social media on Wednesday afternoon.
5. Whale withdrew $1 billion from Coinbase
Sorry, this item is not for sale. Not this whale's. Someone withdrew $1 billion worth of Bitcoin from his Coinbase. According to Santiment, in the early morning hours of March 1st, the whale withdrew 16,000 BTC worth $1 billion from Coinbase.
This is extremely bullish for Bitcoin price. This whale has no interest in selling, even though cryptocurrencies are nearing all-time highs. Moreover, they are not alone.
In February, whales moved an additional $1 billion worth of Bitcoin from Coinbase. They seem to think they can sell now and make a profit, but prices could rise next.
Overall, Bitcoin on exchanges has fallen to a six-year low, and that trend shows no signs of stopping even after the massive $1 billion withdrawal.
This shows high confidence in the future of Bitcoin price, long term, and massive support worldwide.
6. Bitcoin ETF holds 4% of BTC
According to BitMEX data, the Spot Bitcoin ETF held 776,464 BTC at the start of March. That's a whopping 4% of all Bitcoin, and the Wall Street-regulated ETF market has literally eaten up a tiny bit of Bitcoin's on-chain spot supply in less than two months.
While this is not Arthur Hayes' nightmare scenario in which ETFs “could destroy” Bitcoin, it is one that will significantly eat into Bitcoin within two months, and is a precursor to a severe supply and demand shock. Enough and massive support for rising prices.
Zach Pandle, head of research at Grayscale Investments, said:
“There is not enough Bitcoin to accommodate all the new demand, so the natural supply and demand relationship is driving the price up.”
7. Congress decides to allow banks to store BTC
ETFs will compete with retail investors for Bitcoin. Additionally, banks may soon join the Bitcoin race, pushing scarcity and price to new levels.
On the House Financial Services Committee, Rep. Mike Flood (R-Nebraska) recently argued that “we will ensure that consumers are protected by removing barriers that prevent highly regulated banks from acting as custodians of digital assets.'' He submitted a resolution to protect the area.
First, ETF issuers and currently regulated large banks will soon be able to store Bitcoin, contributing to the global shortfall of the 21 million BTC issued to date. . And the supply and demand shock continues.
