🚀 The Most Important Bitcoin Factors Traders are watching right now
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👇 1-10) Our expertise is grounded in a comprehensive toolkit encompassing a profound understanding of cryptocurrency and finance, driven by advanced predictive models. With a proven track record in the crypto industry, leading hedge funds like Millennium and major Wall Street institutions such as Goldman Sachs, Morgan Stanley, and JP Morgan.
👇 2-10) As expected, Bitcoin struggles with the 43,000/44,000 resistance level (see report January 29). We still hope that Bitcoin will break above this resistance and climb to the 52,000 level, but first, this 44,000 level needs to be cleared. With a strong macro and cross-asset tailwind, Bitcoin should rise higher this election year.
👇 3-10) Some were disappointed by our conservative 2024 year-end target (see report February 2). Still, while we could entertain higher levels based on our data analysis, it is the most realistic target as there is no broader bull market theme in place (yet).
👇 4-10) Bitcoin returns exhibit a distinct seasonal trend, with the fourth quarter showing the most robust returns, closely followed by the second quarter. Although the first and third quarters still generate positive returns, their average performance tends to be mixed. Interestingly, while Bitcoin's January performance tends to be modest at +1%, February is a particularly favorable month for long positions. Over the last ten years, prices have trended higher in February in 7 out of 10 instances, averaging an increase of +8%.
Exhibit 1: Bitcoin performance in February, normally a positive month
👇 5-10) On Friday, January 26, when we called for the end of this correction (Bitcoin @ 40,100), we used the signals from our technical chart book indicating that the risk-reward had favored long positions. The performance supports higher prices, and any further dip should be used to add to long position.
👇 6-10) Our follow-up report from Monday, January 29, projected that Bitcoin could reach 50,000 by the end of this quarter as Bitcoin had just completed wave (4) and the next leg higher, wave (5) appeared most likely. Our three reversal indicators have rebounded, with 2 of them from ideal levels.
👇 7-10) While we also expected that 43,000/44,000 would be a minor resistance for Bitcoin (see January 26 report), the reasons were primarily technical, with the fundamental reason being blamed on overambitious US tech companies’ earnings announcements, which were priced to perfection.
Exhibit 2: Bitcoin’s Elliot Wave Analysis targets 52,000 by March 2024
👇 8-10) Even if Bitcoin ETF inflows disappoint, this is not the time to turn bearish as the macro environment will remain a tailwind in 2024, and the US election cycle will see a constructive fiscal response that will lift asset prices higher. Sub-38,000, the ETF hype might be completely priced out and Bitcoin goes back to the tunes of macro and liquidity. The time to turn bearish was in early January when we called for a correction back to 36,000/38,000 when Bitcoin traded at 44,000. We would use any further dip to start buying again.
👇 9-10) Various explanations for why Bitcoin is lacking upside momentum can be made, from FTX creditors selling tokens to raise cash to Grayscale GBTC holders selling and not converting to other ETFs to Celsius emerging from bankruptcy and sending $3bn worth of crypto creditors.
👇 10-10) The US, or at least trading during the US time zone, has become the ONLY driver of upside Bitcoin returns since the low on January 22nd. First, Asia has sold into the ETF listings as trading activity, and Bitcoin returns during the Asia time zone have been lackluster. Second, while Bitcoin has been up +2.4% since January 22, Bitcoin dropped by -2.4% during European trading hours. In short, Bitcoin stayed mostly flat during Asia trading hours, dropped during European trading hours, and is up +4.8% during US trading hours.
Exhibit 3: Bitcoin tends to rally during US trading hours