In 2023, bitcoin (BTC) marked its best performance since 2020. At the same time, a record number of cryptocurrencies were withdrawn from the market in 2023. Is the market ” cleaned up “ ? Are the conditions for an upward recovery met? While the halving will arrive in spring 2024, the SwissBorg exchange platform, which has up to 700,000 verified usersrevealed its outlook for 2024.
The price of bitcoin (BTC) rises considerably
Throughout 2023, numerous bullish elements have accumulated: Cryptocurrencies: a bull market in 2024? – Tremplin.io. Indeed, the relaxation of long rates and the ” back to normal “ faced with the bearish movements of 2022 have encouraged a rapid bullish recovery. The price of bitcoin (BTC) rose from less than $17,000 in January 2023 to more than $44,000 in December (+170% approximately). An exceptional trend which gives all operators hope for its continuation in 2024…
For SwissBorg, “it is very likely that 2023 will be the post-bull market year, marking the start of the famous 4-year cycle”. Indeed, it is remarkable that the increase observed since the start of 2023 is part of the first part of an average upward phase of 2.5 years. The symmetry with previous upward movements is evident (see below):
According to the time division proposed here, the average performance of a second year of the cycle would be around +200%. The great variability of this performance also calls for reading this observation with caution. Despite everything, this could make some people dream, who would expect a target beyond $100,000 per bitcoin (BTC). As a result, this new bitcoin (BTC) cycle could be that of the controlled democratization of cryptocurrencies.
“Bear market create builders, builders create bull market”
“What we love most about Bear Markets is the noise-canceling effect, allowing only projects with clear, strong intent to stand out. »
SwissBorg Crypto Report 2024: End of the Bear Market?
Source : Introducing Hocus Pocus: Crypto Report for 2024 (swissborg.com)
The 2022 bear market lasted exactly 1 year, which is the historical norm. The decline observed in 2022 weighed heavily on market sentiment in 2023. In addition, the market decline appears to have been relatively more ” intense “ than in the past. Indeed, the ” production cost » of bitcoin and the number of cumulative addresses on the Bitcoin network were briefly lower than the price of bitcoin, as well as the long moving average.
Added to this are scandals and regulations. The FCA as well as the European Union have initiated a tightening of regulation, in particular with the initiation of the MiCA project. At the same time, Sam Bankman Fried’s trial following the FTX bankruptcy helped the market turn the page on the disasters of 2022. But we had to wait for rumors about a Bitcoin ETF to attest to the change in the phycology of the market. Just as was the case at the end of 2020 with Elon Musk, MicroStrategy and others, the intervention of several actors is likely to positively change the phycology of the market.
Events that will mark 2024
- The halving, which will reduce the remuneration of bitcoin miners by 2, will take effect in April 2024 (estimated March 30 or April 1). Thus, the reward per block will drop to 3,125 BTC.
- The United States will have to finance nearly 31% of all their debtwhich could weigh on bond yields and financial markets (liquidity restriction).
- The stabilization of central bank key rates could benefit the markets. Indeed, bull markets on cryptocurrencies generally require significant liquidity. FED rates could be reduced by up to 100 basis points. Arthur HayesCo-founder of BitMEX & CIO Maelstrom, considers that “we could be heading for the biggest bull market ever”.
- The SEC’s decision on the validation of the Bitcoin ETF (BTC) could be published on January 10, 2024. This decision is expected to have a positive effect on the market. However, too much bullish optimism, which would potentially already be included in prices, would only have a limited effect.
- Technical configuration of bitcoin for 2024 would be potentially favorable (RSI, moving averages, etc.). The SwissBorg report highlights good probabilities for this prospect.
- The US election will take effect on November 5, 2024. The months leading up to the US elections are known to be generally very bullish on the financial markets.
- The number of cryptocurrency users worldwide could exceed 500 million people. In 2023, it is estimated that around 420 million people will use cryptocurrencies.
Duration and structure of bull markets
THE report exclusive of SwissBorg reveals that “the bull market for Altcoins started on average 1 year later than that of Bitcoin”. Moreover, “the duration of the Altcoin bull market is also, on average, 300 days shorter than that of Bitcoin”. Until now, however, Ethereum has been an exception and it remains an asset quite synchronized with the movements of bitcoin.
Ideally, a bull market is accompanied “basically” by several concordant phenomena:
- A growing number of userswhich implies a greater demand from minors.
- In the long term, we observe symmetrically the increase in mining difficulty and hash rate.
- As a result, this generally translates of the ” production costs “ higher. Any lasting divergence between the ” production cost ” of bitcoin and its price can manifest an excess signal.
Therefore, we can hope that the rise of bitcoin in recent months will be gradually followed by altcoins, even if the largest of them have generally already climbed.
2024: the year of “all hopes” ?
2024 therefore has the chances on its side to show legitimate hopes. In fact, 2023 has alleviated the fears and suffering of the crypto community. However, the risks are that of seeing a year 2024 open with hope, and close with euphoria… And as the Italian proverb says, “He who lives in hope dies of desire”. As the famous investor Benjamin Graham wrote, the higher prices rise, the more caution and withdrawal are required. The intelligent investor, while often afraid of the risk associated with cryptocurrencies, knows how to consider them in an aggressive strategy.
| Active | Annual performance as of 12/23/2023 |
| Gold (USD) | +12.58% |
| S&P 500 | +24.33% |
| BTC/USD | +163.18% |
| ETH/USD | +90.82% |
| MSCI World | +17.51% |
| EUR/USD | +2.91% |
Thus, a new cycle in bitcoin seems truly underway. The economic, financial and psychological context could be favorably oriented. Indeed, the same hopes can arise on the stock markets, or on other assets such as Gold. The S&P 500, which reached its last peak in January 2022 at 4,820 points, is on the verge of surpassing its records. In the same way, the price of Gold is trying to cross its historic highs, the last being recorded on December 4, 2023 at almost $2,150 per ounce. Gold prices have been stagnating for 3 and a half years, and almost 2 years for stock indices.
A start to 2024 which promises to be intense…
The end of 2023 was surprising with the speed of the rise of many cryptocurrencies. This increase, as usual, heralded the bullish recovery in traditional assets. Liquidity is gradually returning, and risk aversion is reducing. The year 2024 begins with hopes that are all the more difficult to satisfy as the rise has already begun…. Therefore, the major question that agitates analysts and market players is to know how far this new era will go… In this regard, the SwissBorg report offers a good omen.
In conclusion
Ultimately, market players confirm a potentially favorable outlook for 2024. Behavioral finance teaches us that any disappointment in the face of this expectation can lead to an even more negative reaction. But for now, all rational hopes are oriented favorably. The psychology of the market gradually becomes optimistic, and without turning to euphoria, the upward breezes increase.
The year 2024 is expected to begin with news related to the bitcoin ETF, an event that captures the market’s attention. Next, halving and policy rates should lead market sentiment. The American elections will also be very important in the second part of 2024. Ultimately, the environment of democratization of cryptocurrencies and the easing of liquidity could benefit this new cycle. Remember that the last historic high for bitcoin (BTC) was reached on November 10, 2021 at nearly $69,000.
As bitcoin is correlated with traditional markets, assets like gold or stocks also present a favorable trend. The year 2024 will thus show which assets will outperform the general trend. Outperformance is a major issue for bitcoin which is still seeking to establish itself as an essential asset.
Maximize your Tremplin.io experience with our ‘Read to Earn’ program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
