BTC has been rallying strongly, lately.
This growth is impressive (and expected), considering how the next Bitcoin halving is only about 2 months away.
BTC, at the time of writing, now trades at around $59,400 and is much closer to its ATH than it has been since 2021.
This rally, throughout 2024, has been fueled by several factors like the launch and the massive demand for spot Bitcoin ETFs, the incoming BTC halving in April, as well as the happenings of the US Federal Reserve.
How likely are we to see Bitcoin rally further, and hit its $69,000 ATH—before March, maybe?
Let's talk facts below:
According to a Telegram report from Singaporean crypto trading firm, QCP Capital, the trading volumes of the 9 spot ETFs that were approved on 11 January earlier this year, have seen trading volumes of more than $3.2 billion.
Moreover, the net inflows into these products have soared to about $520 million, indicating that there is a strong demand for cryptocurrency among investors on all fronts.
Moreover, QCP Capital also notes that these ETFs have had a positive effect on the price of BTC, as they create organic buying pressure on the cryptocurrency.
According to analysts, the upcoming Bitcoin halving is another factor that has been boosting the price prospects of the cryptocurrency.
The QCP Capital analysts speculate that the upcoming halving in April of this year is set to create what is known as a supply shock within the market.
This supply shock, created by the 50% slash in Bitcoin's block rewards is set to force the Bitcoin miners to dump their coins less and to hoard more Bitcoin.
With this in mind, the selling pressure on the cryptocurrency is set to decline massively, allowing the buying pressure from the ETFs to take its place and lead to a higher price.
QCP Capital stipulates that another reason the Bitcoin (and altcoin) market is set to continue further upwards from here, is the investor expectation that the US Federal reserve will loosen its stance on monetary policies.
So far, the Federal Reserve has noted in a recent policy statement, that it will maintain the federal funds rate in a range of 5.25% to 5.5%, marking the third consecutive pause since July, when it last raised these rates.
Moreover, the agency also reported that it will continue its massive bond-buying program, thereby injecting liquidity into the financial system.
All of these factors are set to improve the crypto market's standings against the US dollar, leading to higher crypto prices.
Moreover, QCP Capital also notes that the correlation between Bitcoin and the US dollar index has been negative so far, meaning that the more the dollar prices weaken, the stronger Bitcoin and the altcoins get and vice versa.
QCP Capital highlighted some risks though.
These risks, including volatility and leverage in the market, are set to limit or even reverse Bitcoin's rally.
These challenges, according to QCP Capital might turn out as factors that amplify Bitcoin's volatility, and cause liquidations or even panic selling.
QCP Capital pointed out that the way that the crypto market's prices have been surging as of late has triggered a short squeeze in the market, as well as a buying frenzy among investors.
The firm noted that finding rates on local exchanges are skyrocketing, and some long-term futures are starting to trade at up to +16% over the spot market.
In essence, it means that the market is starting to become overbought, and overleveraged, and even the slightest amount of FUD can trigger a massive sell-off.
Overall, QCP Capital says that Bitcoin might either break above or maintain the 60k "strike zone" by the end of March this year.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.