Bitcoin (BTC) has recently achieved a significant milestone in its trading history. On January 11, the spot ETFs made their debut, and for the first time since then, Bitcoin has surpassed the $46,000 mark. This surge signifies a positive trend for the cryptocurrency, which has seen its fair share of challenges in 2024. Despite its rocky start, Bitcoin is steadily gaining momentum and trading above the $46k territory once again. This upward trend has the potential to bring early investors in the BTC ETF closer to profitability.
Bitcoin’s journey in 2024 has been influenced by the approval of various eagerly anticipated exchange-traded funds (ETFs). These ETFs were intended to bolster Bitcoin’s institutional legitimacy and appeal to a broader range of investors. However, the introduction of 10 ETFs in January caused an unexpected decline in the price of BTC. The value plummeted shortly after reaching $49,000 when Grayscale, one of the funds, began transferring a significant amount of their cryptocurrency to Coinbase.
Grayscale’s decision to convert the Bitcoin Fund ETF to an open-ended fund had unintended consequences. Previously, investors had to hold their shares for a minimum of six months before being able to cash out. When the fund transitioned into an ETF, many investors seized the opportunity to redeem their shares, leading to a massive sell-off. Grayscale sold substantial quantities of Bitcoin, causing its price to plummet to a low point below $39,000.
Despite the adverse effects of the sell-off, it appears that Bitcoin is now on the path to recovery. The downward trend has subsided as Bitcoin continues to rise, partially due to the acquisition of the asset by large holders. This renewed interest and bullish sentiment surrounding Bitcoin have contributed to its current trading price at around $46,165. The recovery indicates that investors remain optimistic about Bitcoin’s potential for growth and profitability.
Markus Thielen, head of research at Matrixport and founder of 10x Research, predicts that Bitcoin is heading towards the $48,000 mark in the near future. Thielen’s research highlights the historically strong performance of Bitcoin during the Chinese New Year festival, which begins on February 10. Over the past nine years, Bitcoin has consistently shown an increase in price when acquired three days before the festival and sold ten days later. This statistical trend suggests that Bitcoin’s recent breakout may lead to further gains.
LMAX Digital, a leading cryptocurrency exchange, shares Thielen’s optimism regarding Bitcoin’s future. They anticipate Bitcoin to continue rising, potentially reaching the $50,000 milestone. Technical analysis using Elliott Wave theory supports this projection, suggesting that Bitcoin has broken out of a range and is poised for a surge towards a new yearly high. Based on Thielen’s interpretation of the wave patterns, Bitcoin is currently in its final, fifth impulsive stage of the rally and aims to reach $52,000 by mid-March.
Bitcoin’s recent breakthrough above the $46,000 mark marks a significant turning point for the cryptocurrency in 2024. Despite facing challenges and a recent sell-off, Bitcoin is once again gaining momentum and attracting the attention of both retail and institutional investors. The support of ETFs, the influence of large holders, and the statistical trends surrounding the Chinese New Year festival all contribute to the positive outlook for Bitcoin’s future. As the cryptocurrency market continues to evolve, investors are advised to conduct their own research and approach investments with caution.