The world’s titan cryptocurrency, Bitcoin (BTC), wasn’t quite in its element over the third quarter of 2023 posting losses near 15% – an eerie echo of its Q4 slide in 2022. As we all recall, the crypto market alpha commanded a market valuation within the scope of $513 billion during the final week of September and chowed down in the rather shallow pool near the $26,000 mark – a daunting 17% dive below the summer heights in the upper $31,000 range.
The proverbial storm-chaser on BTC’s tail in this instance can largely be blamed on an upswing in US bond yields and the persistently resilient greenback. The market caught wind of whisperings that the US Federal Reserve might hold interest rates at loftier heights for extended durations, propelling the dollar. Analysts reached for their raincoats as Q3 US economic data trickled in, attesting to impressive growth and robust labor markets which prompted a dialing down of US recession predictions.
Despite the Federal Reserve’s anthem of potential rise in interest rates again this calendar year, the echoing chorus is far from harmonious with the tunes of the crypto market. Hardier bond yields and the high tide of the dollar discourage hoarding of volatile, non-yielding assets like Bitcoin, turning them less attractive. Simultaneously, a bullish dollar means Bitcoin’s USD equivalent retail price rises, making it heavy on the pocket for global investors.
The fact is, as institutional acceptance grows and spot Bitcoin ETFs earn the nod of approval – Bitcoin will further court macroeconomic influences. A discernible dip in the tune of central bank policies aiming for rate cuts versus rate hikes could open the window for future BTC bull markets. However, this rumor is unlikely to really start playing until the clock strikes 2024.
The halving – an event that sees Bitcoins’ issuance rate halve- anticipated in April 2024, is another soundtrack expected to pump up BTC’s volume and value. This narrative historically strikes a chord with bull markets, and, combined with a theatrical display of rate reductions and other bullish catalysts (e.g., Bitcoin ETF approvals, regulatory clarity), could be the curtain-raiser to 2024’s BTC bull market.
Nevertheless, current BTC investors might need to brace for a stormy short-term forecast. Options indicate pessimistic anticipations with regards to near-term prices, signaling a potentially volatile period. The technical picture also seems to echo the sentiment, with BTC on the edge of breaching below a long-term pennant structure, potentially paving the way to $20,000.
All said and done, the silver lining for shrewd investors rests in thecalendar year 2024. A fallback to such values could be seized as a golden opportunity to build reserves for the expected BTC bull run. However, the brief period till then demands prudence, agility, and possibly a weather-proof umbrella.
Source: Cryptonews
