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- Bitcoin’s price cooled at $41,800, down 4% this week and on track to snap the first eight-week streak of gains since 2017.
- Investors moved a net $860 million of BTC to exchanges, signaling profit-taking, IntoTheBlock noted.
- BTC to hit $75,000 early 2024 as U.S. spot bitcoin ETF approval and halving narratives combine, WOO Network predicted.
Bitcoin’s (BTC) rally stalled, putting it on track to snap a historic eight-week streak of gains as its price remained muted at around $42,000 as of Friday.
The largest cryptocurrency by market cap recovered to $43,000 after Monday’s 10% flash crash to $40,000 that flushed overenthusiastic leveraged bets on higher prices. A dovish Federal Reserve projecting rate cuts and the falling U.S. dollar bolstered the recovery, but lost steam by Friday and BTC slipped back to $41,500.
On-chain data indicates significant profit-taking behind the stalling prices. Bitcoin saw $860 million of net inflows into crypto exchanges during the week, the highest level since March, analytics firm IntoTheBlock noted Friday. Moving assets to exchanges usually signals an intention to sell, indicating that many investors decided to take some profits after bitcoin’s 65% rally from $27,000 in October.
If BTC were to finish the week below $43,800, it would end an eight-week streak of gains, the longest winning streak since April to June 2017, according to TradingView historical data.
BTC was changing hands at around $42,000 at press time, down almost 4% since the start of the week.
Experts predict BTC all-time high prices for next year
The recent dip in price is likely just a blip on the radar, as bitcoin is primed for a strong 2024 with multiple investment narratives supporting rising prices, experts argued.
“I do think this kind of trading is normal,” Craig Erlam, senior market analyst at OANDA, said in an interview with CoinDesk TV on Friday. “If you look at other asset classes, things don’t move in straight lines.”
Unmute
Market participants expect interest rates to fall “aggressively” in the U.S., U.K. and Europe for the next couple of years, which is more beneficial for risky assets compared to the past 18 months of rising rates, Erlam explained. The Dow Jones Industrial Average hitting an all-time high this week underscored the improvement in investors’ risk-appetite, he added.
“To take a breather and define a new range can be seen as a healthy sign,” Anthony Rousseau, head of brokerage solutions at TradeStation, said in an emailed note.
He said the Federal Reserve hinting at easing monetary policy and cutting rates next year injected a “windfall of confidence” in risk assets like crypto, but the more prevalent theme is still an increasingly anticipated U.S. regulatory approval for spot bitcoin exchange-traded funds (ETFs) by BlackRock and others, and the fresh demand for BTC they would unleash.
Meanwhile, long-term holders – or HODLers, who hold on to their assets for at least a year without moving – haven’t started selling despite the short-term profit-taking, Rousseau noted, making bitcoin’s supply increasingly restricted.
“It’s possible we have the perfect storm brewing for a strong 2024, with the possibility of closing in on all-time highs by the end of 2024,” he said.
All-time highs could come even sooner, crypto trading platform WOO Network predicted, as spot ETF listings and bitcoin’s upcoming halving in April, which will slash new BTC issuance by half, may create an enticing narrative combination.
“We targeted $75k for BTC in early 2024 and believe demand will increase heavily as the ETF and halving narratives combine, leading BTC to develop an additional narrative as a safe haven asset,” WOO Network’s year-end report said.
Edited by Nick Baker.