- Bitcoin’s price now has a strong correlation with macro events, including Fed interest rate decisions
- Analysts expect a bandwidth breakthrough, but disagree on when it might occur
Bitcoin [BTC] rose 7.5% to reach $66,000 on the price charts after the release of lower-than-expected key US inflation data. The positive reaction to cooler inflation data is part of Bitcoin’s broader move following major macro events, including the Fed’s interest rate expectations.
Rob Hadick, General Partner at crypto venture firm Dragonfly, recently commented at the same point, referring to Bitcoin as a ‘macro’ asset. According to the director
“I think Bitcoin is a macro asset, it seems to be trading in line with the amount of liquidity there is in the market.”
He added that the market will react to anything that affects liquidity, including quantitative easing, reductions in balance sheets or Fed interest rate decisions.
Will ‘Better’ Macro Conditions Help Bitcoin in 2024?
According to CoinShares’ facts, The stronger correlation between BTC and macro events, especially the Fed’s interest rate decisions, has recently intensified after flows into new US spot BTC ETFs dried up.
Most market watchers noted that overall liquidity was sluggish, which explained BTC’s subdued price action in recent weeks. One of the spectators, crypto analyst Jamie Coutts, claimed that while global liquidity was on an upward trend, momentum was flat.
Another market watcher and Bitcoin analyst, Willy Woo, confirmed the ‘slow’ pace of liquidity, but predicted a breakout in October 2024.
“Global liquidity is forming a bullish ascending triangle. Expected breakout before October 2024. #Bitcoin 2025 will be one for the record books.”
Source: X/Willy Woo
Based on the above global liquidity forecasts, BTC could extend its ongoing consolidation ($60K-$72K) into early Q4 2024. The timeline of the above forecast differs slightly from Mike Novogratz’s predictions.
Mike Novogratz, founder of Galaxy Digital, projected a possible range breakout by the end of the second quarter.
He’s not alone either. Philip Swift, founder of the analysis platform Look Into Bitcoin, named that based on the Golden Ratio Multiplier, BTC could explode its current value two or three times.
“The GR Multiplier has done an excellent job in the adoption phase of Bitcoin. We are now entering a new phase (supercycle?! kek)”
Source: X/Philip Swift
The GR multiplier measures short- and long-term price projections based on Bitcoin’s adoption curve and market cycles.
Although it has accurately predicted previous market cycle tops, Swift believes that the current GR Multiplier ‘top’ suggests that BTC’s adoption phase is coming to an end.
“Bitcoin is approaching the end of its adoption growth phase and is entering a more mature phase, integrated into global markets. See recent Bitcoin ETFs for proof.”
Ergo, analysts expect BTC to break out of the range and rise further, but have different timelines for the breakout.
In the near term, BTC could be eyeing the range high at $71,000 after lower and higher time frame market structures turn bullish.
Source: BTC/USDT on TradingView