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Publication date: October 31, 2024
On July 26 we already wrote that Bitcoin was getting ready for the ride to $100,000.
Click here for this article.
Below you will find at a glance Bitcoin's movement over the past nine months with our commentary and price target.
In the chart, you can immediately see that the price has been moving within the relatively narrow range between $53,000 and $74,000 for months. Having moved from the $25,000 to the $74,000 level, the price movement in recent months is characterized as corrective sideways.
What's currently going on in Bitcoin?
In recent weeks, there has been a record inflow of capital into the Bitcoin ETF. The ETF is the regulated exchange-traded fund that tracks the price of Bitcoin. This billion-dollar inflow comes from institutional parties. This gives confidence and, of course, momentum to the price. Moreover, institutional investors such as banks and pension funds can provide many more inflows.
In addition, investors are capitalizing on the expected election victory of Donald Trump. If he becomes president again, it is expected to be positive for Bitcoin. Trump's victory, however, is not at all certain yet so this reaction is rather based on speculation.
Further factors are that historically, in the year of a "halving," the fourth quarter has always been positive. Halving means halving the number of Bitcoins created. Since the "halving" was in April 2024, many investors expect a good fourth quarter of 2024 and will invest.
In addition, historically, the 18 months following the 'halving' have been positive overall, which in turn attracts investors.
What is Bitcoin's position based on technical analysis?
Technically, it is clear that a closing level above $74,000 will be the technical starting signal for the ride to the $100,000 mark. On Tuesday, the price tested this crucial level and came back for a while. The probability is high that the price will fall back briefly to the $69,000 level before finally breaking through the $74,000 level. The lower limit for the stop loss can be held at $52,000. A closing position below that will negate the $100,000+ scenario.
What are the particular risk factors for Bitcoin in the coming weeks?
Bitcoin already guarantees big moves and requires the investor to be stress-resistant. This will start to increase in the coming weeks because, on Friday, November 1, the very important monthly labor figures from the US will be released. This is a gauge for the FED on its interest rate policy. The FED will meet on Nov. 7 for its interest rate decision and commentary.
briefly explaining these events; declining interest rates in the U.S. are favorable for the price of Bitcoin. To lower interest rates further, inflation may not increase. This means that the labor figures in the US should not be better than expected. In other words; if the expected increase in the average hourly wage is 0.3%, but the actual increase is 0.4%, this can be inflationary because higher wages than expected can be passed on to the prices of goods and services. Thus, for a favorable Bitcoin exchange rate, the U.S. economy mustn't overperform.
Now that we are talking about the U.S.; on November 5, there is a Presidential election there and this is the most risky factor in the coming week. Historically, the period surrounding the presidential election creates a lot of insidious volatility in the financial markets.
It's crucial to manage emotions and maintain small positions in such situations. In this way, you can withstand the possible storms.
Conclusion
Bitcoin has the wind in its sails and is technically on a breakout above the $53,000-$74,000 trading range in which it has been moving for a long time. With a closing position above $74,000, consider taking a position or extending the existing position. The price target is at least $100,000 by mid-2025. The stoploss is $52,000. Once the price closes below this, the upside scenario expires.
Disclaimer: Investing involves risk. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts' own insights and experiences. They are therefore for educational purposes only.
