Bitcoin Anticipated to Go Parabolic This Year!

In recent weeks, the world of crypto currency has witnessed a series of events that have captured the attention of investors and enthusiasts alike.

Bitcoin, the flagship crypto currency has faced a significant dip in price prompting concerns among market participants.

However, an unexpected twist unfolded as miners entered a massive buying spree acquiring USD 482 million worth of Bitcoin to defend the crucial USD40,000 support level.

Today we will explore the dynamics behind this strategic move by miners delve into analysts' predictions of a potential supply shock before the halving and examine an expert's forecast of a crypto bull run surpassing the 2021 rally.

Bitcoin's Resilience

On January 19, Bitcoin's price hit a 40-day low of USD 40,700 causing anxiety within the crypto community. This decline was attributed to a sell-off wave following the much-anticipated spot ETF approval verdict. However, amid the market downturn Bitcoin miners exhibited remarkable resilience. On-chain data revealed that miners increased their reserves by 12,058 BTC, equivalent to approximately USD 494 million at current prices. This strategic move was timely suggesting that miners stepped in to prevent further decline just as prices approached the critical USD 40,000 support level.

Miners, being influential stakeholders in the proof-of-work crypto currency ecosystem significantly bolstered confidence by investing millions to defend their positions. Bullish futures traders also demonstrated resilience maintaining optimism despite a 7% drop in BTC price on January 19. The open interest in Bitcoin derivatives markets barely decreased indicating that traders holding LONG contracts were doubling down on their positions anticipating a swift rebound in the spot markets.

As Bitcoin hovered below USD 41,000, concerns arose about triggering stop loss and margin call orders if the USD 40,000 support was breached. However, the USD482 million acquisition by miners coupled with derivatives traders defending their positions has created substantial demand to potentially keep Bitcoin above USD 40,000.

IntoTheBlock's in/out of the money around price data further supported this highlighting significant support in the USD 40,000 area. The presence of 679,910 current addresses acquiring 313,000 BTC at the maximum price of USD 40,313 suggests a strong buy wall that could prevent further downward movement in the short term. Additionally, Bitcoin bulls may regain control if the price surpasses the USD 45,000 barrier.

The Supply Shock

Analysts are predicting a major supply shock in the Bitcoin market leading up to the upcoming halving in April. Since the U.S. Securities Exchange Commission approved spot Bitcoin ETFs, Bitcoin's supply dynamics have undergone significant changes. Volatility within a narrow price range of USD 41,000 to USD 44,000 has been attributed to supply dynamics influenced by ETF market activities. Massive BTC transfers, such as Grayscale's movement of over USD 1 billion worth of BTC to Coinbase from its ETF fund, have contributed to a daily inflow of 5,000 to 7,000 BTC to custodian exchanges, while only 900 BTC is being mined daily.

Despite the inflow, a record percentage of BTC supply remains untouched. The unique supply dynamics of Bitcoin coupled with a growing ETF market, indicate a potential supply side illiquidity before the halving.

Bitcoin's supply has already decreased from 19.6 million to 19.4 million in the past week, defying historical trends of increasing supply leading into a halving. With the ETF market rapidly expanding and Bitcoin becoming the second largest ETF commodity in the U.S., the market is poised for intriguing and unpredictable movements in the months leading up to the halving.

Predictions of a Parabolic Bull Run

Looking beyond the immediate challenges analyst Kyle Chassé, the founder of Master Ventures, presents a bold prediction for the crypto market. In a recent video on Crypto Banter, Chassé anticipates a USD 100,000 BTC and a USD 7,000 ETH by the end of the year, with significant price movements starting around May in a post halving rally. Despite expecting 15%-20% pullbacks, Chassé emphasizes the massive institutional buy pressure, surpassing previous market trends. Institutions, driven by the desire to increase assets under management (AUM) and earn management fees are displaying a long term bullish sentiment.

Chassé also predicts Ethereum (ETH) as the next institutional play, foreseeing a possible ETH season with prices reaching between USD 6,000 to USD 7,000. He views Solana (SOL) as a blue chip, projecting a price range of USD 500 to USD 1,000, backed by institutional interest from major players like Franklin Templeton. Comparing these predictions to the 2021 bull run, Chassé anticipates a more parabolic and sustained bull run in 2024.

Outlook

The recent actions of Bitcoin miners, coupled with analyst predictions of a potential supply shock and a parabolic bull run, highlight the increased attention to the crypto currency market. The strategic moves by miners to defend the USD 40,000 support level, coupled with ongoing developments in the ETF market, set the stage for a period of growth.

As the market approaches the halving in April, all eyes will be on Bitcoin's supply dynamics and the potential for institutional involvement to drive significant price movements. Analysts like Kyle Chassé envision a bullish future for Bitcoin and select altcoins, suggesting that the crypto market may be on the verge of another historic rally.

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Posted Using InLeo Alpha