Are Crypto Traders Right About $70,000 Bitcoin?

According to Bloomberg News, market sentiment around Bitcoin’s potential has undergone a remarkable 12-month turnaround.

A year prior, crypto was faltering, making the idea of Bitcoin retesting its record near $69,000 seem improbable. Today, several technical analyses predict renewed gains.

Bloomberg acknowledges that some analysts rely on comparisons of Bitcoin’s current rally to $52,000 with past upswings, suggesting further upward price trajectories in upcoming weeks. While the past isn’t always a perfect predictor, especially with a young asset like Bitcoin, certain patterns can signal trends.

Bloomberg reports that Bitcoin prices experienced a threefold increase at the start of 2023. Factors like optimism tied to SEC-approved US-based spot Bitcoin exchange-traded funds and Bitcoin’s upcoming supply growth reduction (“halving”) contribute to this upsurge. Additionally, the cryptocurrency has seen continued gains throughout February. Analyzing trends over five years, Bloomberg indicates an average 49% climb during three-month periods following similar upward streaks, potentially leading Bitcoin to $78,000.

Richard Galvin, the founder of DACM (a crypto investment firm), tells Bloomberg that Bitcoin’s market position remains robust.

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Bloomberg then introduces Elliott Wave Theory, a type of technical analysis focusing on identifying recurring market cycles and investor psychology. Using this method, some foresee a Bitcoin dip towards $40,000 before potentially soaring beyond $69,000. Elliott Wave Theory, while popular, remains somewhat controversial and shouldn’t be viewed as infallible. Bloomberg highlights Bitcoin’s prior peak coinciding with an abundance of global market stimulus.

Bloomberg points out how traders use options contracts strategically. “Options” give them the right (but not the obligation) to buy or sell an asset at a set price by a certain date. Analysis using data from Deribit, the leading crypto options exchange, identifies Bitcoin call spreads as a popular tool. A “call spread” means buying one “call” option while selling another with a later expiration date and higher target price, signaling investor belief in potential but more limited increases in Bitcoin’s value.

Bloomberg also reports that overall options markets assess the likelihood of Bitcoin achieving a fresh all-time high pre-“halving” within a 20-25% range. Caroline Mauron of Orbit Markets (a digital-asset derivatives liquidity provider) views this estimate as plausible.

At the time of writing, Bitcoin is trading at around $51,883, down 1% in the past 24-hour period.

Featured Image via Pixabay

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• Source: https://www.cryptoglobe.com/latest/2024/02/the-market-set-up-for-bitcoin-remains-very-strong-says-digital-asset-capital-management-ceo/