On March 5th, the Bitcoin price did something most investors hadn’t expected for several months yet: it reached a new all-time high level, something that hasn’t occurred in three years. The ETFs were just released on January 10th, and the next halving is yet to happen, but the bullish rally has already been ongoing since February. Throughout 2023, prices didn’t manage to climb as much as expected, with stagnation more common than most would have preferred. However, it was a break from the difficult bear market of 2022 and paved the way for the growth that will dictate trends in 2024.
Price Increase
As of March 5th, the Bitcoin price climbed above $69,000, a 5% growth over the span of twenty-four hours. Over the last fortnight, the price rallied by over 20%, reaching the all-time high levels of 2021. Investors were anticipating the next considerable growth to occur in the aftermath of the next halving, but it seems that the momentum has already grown strong enough to allow more rapid growth.
The main reason for this price elevation is the exchange-traded funds. While in the beginning, they didn’t yield the results that investors were expecting, and the price movements were mainly dictated by the engagement of companies, corporations and institutions, this has now changed, and the ETFs are behaving exactly how they were expected to. In fact, their effect on the market might have been understated.
While previous estimations said that it’s likely for Bitcoin to climb to levels ranging from $80,000 to $100,000 in 2025, the newer forecasts say that Q4 2024 will see levels between $100,000 and $120,000. And that’s the more conservative predictions that don’t take only the optimistic scenarios into account but make room for losses as well. 2025 is still expected to bring forth a new peak.
Volatility
Realistically, it is improbable that price corrections and losses won’t intervene along the way as well. Historically, this has always been the trend, and continuous growth is unsustainable for crypto in the long run.
Investors are confident that any declines will be less extreme than the previous ones. This time, investors and analysts are looking at the historical data associated with gold ETFs. After they were launched, there was an episode of considerable growth. Later, the trajectory slowed down but remained profitable nonetheless.
ETFs are a fundamental part of the ongoing rally, accounting for nearly 80% of new investments in the marketplace. Some believe the BTC-backed ETFs could even overtake the gold ETFs. Although the two markets don’t really overlap, there have been instances when they were compared. The reason is pretty simple. Since Bitcoin is colloquially referred to as “digital gold,” comparisons have started to appear. Add to that the fact that the asset is known for its ability to maintain its value over a long time.
While Bitcoin has not been around for half as long, it is an increasingly popular choice for investors.
The Outlook
The cryptocurrency space is challenging to predict, and coming up with 100% accurate estimations is basically impossible. While other investment markets are subjected to fluctuations as well, and there’s no transaction and portfolio-building endeavor that is entirely free from risk, the fact that these markets have been around for longer provides them and their investors with more stability. Bitcoin is only now becoming more mature.
Even though BTC is the most reliable digital coin, it is still not completely trustworthy in the eyes of many investors. That is because sudden price variations can still occur. While some are beneficial, some are more troublesome, and the fact that all are difficult to predict makes coming up with a complete, helpful strategy very difficult. However, historical data was something the investors knew they could always rely on. Although the market is mostly unpredictable, it follows some patterns as well. While it isn’t set in stone that the trajectory the coin took in the past will be the same in the present, just because some of the factors are similar, it can happen sometimes.
2024 is the first year when that might not work anymore. The mix of the halving with the ETFs, a completely new product that is a novelty in the crypto area, will create different conditions. The most likely scenario is that the deflationary supply will blend with the demand for ETFs. Until the $85K range, it is still possible that Bitcoin will continue to grow, but going past that volatility can intervene.
Triple Top
The price movements have also led some to wonder whether a triple top is possible. This event occurs when prices reach a peak, then retrace and decline again and again.
Once the price escapes this pattern, the triple top is considered over. This cornerstone event allows investors to decide whether they want to enter short positions or not. Market participants are confident that Bitcoin will continue to grow after surpassing these final hurdles.
Many investors reject the idea that BTC is at a triple top right now, saying that the pattern is entirely different. Some expect the altcoins to grow as well after Bitcoin reaches its all-time high. This is in line with the way the Bitcoin market and its movements tend to set the tone for the entire cryptocurrency environment. All tokens perform well when Bitcoin is doing well, and they experience trouble when BTC goes down.
The Bottom Line
2024 will be an exciting year for cryptocurrencies, with growth predicted to continue through the end of the year and then later into 2025. If you’re an investor, you must remember to keep to your strategy. The market growth can cause you to act in a way that puts your holdings in jeopardy and causes you to lose capital rather than see gains. When the market acts unpredictably and there are many fluctuations and changes, that’s when you need to be more careful than ever.
To protect your portfolio this year, make sure you avoid FOMO and stick to what you know. If you feel comfortable taking a little risk, go ahead and do it, but don’t invest more than you can realistically afford to lose.