Bitcoin Set to Rally Amid FTX Payout and Fed Developments

Recent research delves into the macroeconomic influences and seasonal trends that might indicate a potential rally for Bitcoin in the coming months. However, it also emphasizes the importance of being cautious amid possible risks.

Potential Positive Shifts

Bitcoin may be approaching a significant rally by the close of 2024, according to findings from a recent research report. This document details the volatile trends observed this year while discussing multiple factors impacting the cryptocurrency market.

Particularly noteworthy is the anticipated FTX payout, which could amount to $5-8 billion. This event is expected to potentially elevate market sentiment.

“There is a possibility for substantial gains in risk assets, as indications suggest that the Federal Reserve may lower the threshold at which it will intervene to protect investors. This could lead to broader portfolio realignment in expectation of 2025.”

Seasonal Influences

Historically, Bitcoin (BTC) has demonstrated strong performance from October through March. This pattern, referenced in the research, suggests that a similar trend may unfold this year, informed by past market cycles, including those from 2014, 2017, and 2021.

“While our previous bearish outlook was based on numerous factors, Bitcoin’s behavior in 2024 appears to be mirroring its seasonal trends, as it did in 2023.”

Key Catalysts and Risks

The report outlines several external elements that could positively influence Bitcoin’s performance as the year concludes. Increased liquidity is expected to bolster bullish tendencies.

Macroeconomic factors, including Federal Reserve interest rate changes, inflationary pressures, and political dynamics related to the upcoming U.S. elections, are all considered potential drivers of BTC’s price movements.

Nonetheless, despite the favorable conditions, investors are advised to remain cautious, given Bitcoin’s historical volatility that has led to drawdowns up to 70% during past market cycles.

“Two crucial levels to monitor for Bitcoin are the previous peak of $68,330 and the 21-week moving average. Effective risk management will require careful trading around these points, even if it means selling in response to market fluctuations at less than ideal levels.”

Bitcoin Rally Correlated with Gold Surge

The off-risk asset gold has surged over 5% since September 9, reaching a new all-time high due to global geopolitical tensions and perceived interest rate cuts.

Crypto analysts speculate on the effects this significant rise in gold prices could have on Bitcoin. A recent interest rate cut of 0.5% by the Federal Reserve on September 18 has contributed to this upward momentum in gold, which reached a record price of $2,629 per ounce as of September 23.

The interplay between these assets suggests interesting dynamics that could influence Bitcoin’s trajectory moving forward.

Further insights: What Solana’s critics get right… and what they get wrong