Bitcoin has rallied considerably since the beginning of 2024, even surpassing its previous all-time high levels. Binance data shows that the main reason behind this growth is the emergence of exchange-traded funds, an asset class that has been widely anticipated by investors for several years and which was expected to significantly impact price action as a whole.
However, as is always the case with the crypto world, things don’t remain stagnant; they are subjected to price corrections, which are common after periods of considerable growth.
Resets
At the beginning of April, Bitcoin went through a reset of several vital metrics due to the emergence of a swift price drop that removed a lot of the leverage. This correction was later remedied, but investors immediately noticed its effects. The drop came with a significant liquidation event that had a positive impact on marketplaces that were already becoming overheated as a result of the steep climb.
Funding rates turned negative as a result, another consequence of how the prices were moving lower as well, as margined contracts were already in negative areas. However, before recovery can happen, leverage must be destroyed, which became even more evident after the perp funding rates went from rates as high as 77% to completely flat levels.
At the same time, in spite of this compression in the figures, the forward curve remains relatively elevated, and some analysts believe that it is this movement that will bring the curve back to its previous lower levels.
The RSI, the relative strength index, is back to the 50 midpoint, showing that the market is now in relative balance since levels above 70 show overbought conditions while those below 30 point to overselling.
2028
One of the main features all crypto users share is a propensity for predictions and estimations. They are the only thing that allows investors to come up with relatively stable trading strategies that can guarantee revenue levels that are higher than the losses.
And while the community space is still rife with predictions regarding the ways in which the market will develop in the aftermath of the 2024 halving that is rapidly approaching, investors have already begun talking about the next halving event, the one that will take place in 2028.
If growth remains constant and follows roughly the same patterns it has followed until now, many users estimate that the price will be somewhere around $430,000. Since the last halving in 2020, the price for a single BTC climbed by a whopping 658%, and analysts expect the current cycle to follow in the footsteps of historical patterns and continue growing.
At the same time, there’s also the fact that the rallies that intervene in the aftermath of the halvings have recorded lowering returns over the past few years, amounting, on average, to 45%.
That means that the next rally will deliver a reward of around 360% for the following cycle.
ETFs
The exchange-traded funds have been widely anticipated by all market participants, and when they finally arrived in January, the BTC community knew that they would leave their mark on the ecosystem. The price surge has been mainly attributed to the sizable quantities of inflows that arrived because of the launch of this new digital product.
The tendency can be explained by the fact that it is primarily retailers and other institutional investors that were incentivized to join the market now and trade ETFs, and since these investors own large amounts of capital, they will naturally impact the workings of the general market environment.
However, the halving played a role as well, with historical data showing that anytime a halving is on its way, the prices climb as well. The fact that the 2021 all-time highs were surpassed ahead of it in 2024 shows exactly how high the anticipation level for ETFs truly was. Yet, some investors believe that the quantitative research presents a different picture, one in which there is no correlation between the halving itself and the price this time around.
In this sense, some investors have expressed the belief that this cycle will be mellower and that while a level of around $435,000 by 2028 would be great news for the investors, there’s no certainty that it will become a reality.
The six-figure scenario for Bitcoin would become more likely if the BTC-based ETFs manage to overtake the gold ones, a situation that is not as far-fetched and unrealistic as it may sound but which would nonetheless take at least a couple of years to come to fruition. The fact that the Bitcoin spot exchange-traded funds are evolving at a much faster rate due to their appeal to investors and novelty gives investors hope that the $400,000 price could become a part of Bitcoin’s future.
Trading hours
The ETFs have changed the market, and many investors are unsure how to interpret the data they get now that the new asset class has also come into the picture. For many years, there was a dip during Asia trading hours, but the ETFs appear to have started a new trend: changes during Us hours. Since ETFs are a new addition to the blockchain and nobody is 100% sure of what they can achieve, it’s crucial to remain involved and proactive about the safety of your portfolio since one wrong choice can be enough to melt a significant portion of your gains.
This trend is a new addition to the market, as the previous two years followed a more traditional pattern. But what is the reason for the shift? Market watchers believe it is due to the efforts of investors who are keen on benefitting from the small profit margins. This means that savvy traders also have something to learn and could benefit from engaging with the market right before the beginning of this timeframe and a few hours in the aftermath to make the most out of the volatility and fluctuations.
The crypto space continues to evolve, and there is definitely no market that is doing better than Bitcoin. The first cryptocurrency has also remained the safest and most trustworthy in the eyes of investors and is likely to remain so for a long time.