The crypto space has seen significant regulatory actions this year, but despite that, bitcoin has experienced a rally with a 130% gain year-to-date. However, it is important to note that bitcoin is still down over 45% from its peak of $68,990 in 2021.
I recently spoke with Anthony Rousseau, the head of brokerage solutions at TradeStation, about his outlook for bitcoin in 2024.
A Bull Run in 2024?
Rousseau believes that bitcoin has a promising setup for a bull run next year. The current fair value of bitcoin is approximately $42,000, while the 200-day moving average stands at around $29,000. These indicators are all trending upwards, according to Rousseau. Additionally, the on-chain data reflects that very few long-term holders are selling their bitcoin, which is seen as a bullish sign.
Based on these factors, it is likely that bitcoin will surpass $40,000 at the beginning of 2024 and reach a new all-time high by the end of next year. This upward trajectory will largely be influenced by the anticipated approval of bitcoin exchange-traded funds in the U.S. and the upcoming halving event in April.
Bitcoin Halving and Price Appreciation
Bitcoin halving is a significant event in the world of cryptocurrencies. It occurs when the block rewards given to crypto miners are cut in half after every 210,000 blocks are mined, approximately every four years. Interestingly, Bitcoin has historically experienced price appreciation in the months following halvings.
Favorable Macroeconomic Conditions
Furthermore, the macroeconomic conditions appear to be favorable for risk assets, including Bitcoin. Investors are anticipating that the Federal Reserve will begin reducing its key interest rate as early as March. According to the CME FedWatch tool, there is a 46% chance that the central bank will lower its interest rate by 25 basis points during its March meeting.
Bitcoin and the 2024 Presidential Election
The upcoming 2024 presidential election could also serve as a tailwind for Bitcoin. Throughout history, the cryptocurrency has performed well during election years. For instance, in 2012, 2016, and 2020, Bitcoin experienced impressive growth rates of 160%, 123%, and 303%, respectively.
Positive Outlook for Risk Assets
While it is important to recognize that Bitcoin is relatively young, with its creation dating back to 2009, election years have generally been favorable for risk assets. In fact, the S&P 500 index has seen positive returns in 17 out of the past 23 election years.
In the past seven days, Bitcoin has risen by 3.4% and was trading slightly below $37,800 on Wednesday, according to CoinDesk data. Ether, another popular cryptocurrency, witnessed a 1.8% increase during the same period, reaching around $2,030.
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