- As per expectations, Fed will loosen its quantitative tightening monetary policy by 2024 allowing money to flow back into risk assets like Bitcoin.
- Also, the Bitcoin network shall be undergoing the halving event in 2024 which will set the basis for the next big bull run.
Bitcoin peaked at its all-time high of $69,000 last year in November 2021 amid a massive bull run. Since then, the BTC price has been moving sideways and during the brutal market crash this week, Bitcoin collapsed to $20,000.
It seems Bitcoin might not come out of the bear grip anytime soon owing to the current global macro conditions. As per historical trends, the Bitcoin bull run comes every four years. However, this time, it might come a year earlier in 2024. Let’s take a look at some of the key reasons why the next major Bitcoin bull run will happen by 2024.
The global macro perspective
Owing to the high inflation in the United States, the Federal Reserve announced a 75 basis points jump in interest rates at Wednesday’s FOMC meeting. This was the highest interest rate hike in 28 years as the U.S. inflation jumps to a four-decade high.
Federal Reserve Chair Jerome Powell has made it clear that they will not stop with interest rate hikes until there’s “compelling evidence” of the inflation going down. As the Fed plans to suck out the market liquidity, the money is likely to flow into more stable assets such as bonds. The U.S. 10-Year Treasury Yield is already ticking at a high of 3.5 percent as of now.
As per market analyst @tedtalksmacro, things could start taking a turn as policymakers are likely to start cutting rates in 2024. In one of his recent posts, the analyst writes:
2024 the next big year for crypto – pending regulatory headwinds. The Fed’s updated projection material showed policymakers expect to begin cutting rates in 2024 – which aligns with the next Bitcoin halvening! Between now & then, the picture is bleak until data deteriorates.
But note that as per previous halving cycles, Bitcoin has always touched a new all-time high 12 months after the rally.
When will things start looking better again for Bitcoin?
It’s always difficult to predict the exact bottom. But historical trends and past chart patterns always help to make a guided decision. Popular crypto analyst Rekt Capital writes that Bitcoin could enter a major consolidation over the next six months up to 2022. He also expects BTC to trade in a tight consolidation range.
— Rekt Capital (@rektcapital) June 15, 2022
The analyst also believes that Bitcoin could see the final bottom by Q4 2022 by drawing a correlation between the previous bottoms and the next halving cycles. The analyst wrote: “In 2015, BTC bottomed 547 days before the Halving. In 2018, $BTC bottomed 517 days before the Halving (discount March 2020 crash). If Bitcoin is going to bottom 517-547 days before the upcoming April 2024 Halving… Then the bottom will occur in Q4 this year”.
On the other hand, Fidelity believes that Bitcoin is undervalued and oversold at the current junction. Bitcoin maximalist and MicroStrategy CEO Michael Saylor suggested that this could be a good entry point if someone is investing for a four-year horizon.