In the last few weeks, Bitcoin has recorded a drop of 15% from its 2023 highs, but many experts still believe that the leading cryptocurrency is making moves ahead of its next bullish run.
Price Dip: Is A New Bull Cycle Near?
BTC’s price has declined by almost 15% from its 2023 peak of approximately $31,000. This slump is partly due to a combination of the following factors: the regulatory crackdown on two popular crypto exchanges and the US Fed’s hawkish monetary policy.
Meanwhile, Bitcoin has soared by 60% in its year-to-date (YTD) and continues to trade above $25,000 (its critical support level). Nevertheless, several factors can trigger the next bull cycle for the leading digital asset.
Here are four of those factors:
Forthcoming Bitcoin Halving
The April 2024 Bitcoin halving is an event that happens every four years, which reduces the cryptocurrency’s supply rate by 50%. Past Bitcoin halvings in 2012, 2016, and 2020 have all preceded significant price increases and new record highs.
For perspective, Bitcoin’s value has increased by 276% since the last halving in May 2020. Some analysts, notably Lark Davis, predict that the BTC market will remain in the accumulation phase until the halving.
However, other analysts believe BTC’s price could soar to $160,000 by April 2024.
ETF Registration
BlackRock’s SEC Bitcoin ETF registration has raised hopes among industry players about a pre-halving price rise. With $8.5 trillion in assets under management, BlackRock has a near-perfect SEC ETF approval record.
However, the SEC will approve or deny BlackRock’s application by March next year. Meanwhile, analysts predict that the SEC’s approval may further quadruple BTC’s value in addition to the halving.
Famous Twitter crypto analyst, Crypto Tea, notes that BlackRock filed for this application because it believes that the upcoming halving will trigger a rising demand for Bitcoin owing to global hyperinflation. Crypto Tea added that the firm is playing a game theory to capture Bitcoin’s performance before its competitors.
Continuation of Bitcoin’s Market Dominance
After the SEC’s actions on Binance and Coinbase, there has been intense selling pressure on top altcoins following the regulator’s statement that all cryptocurrencies except Bitcoin are “unregistered securities.” Consequently, Bitcoin’s market dominance has exceeded 50% for the first time in two years.
Hence, it is unsurprising that investors are selling their altcoins to purchase Bitcoin. According to MicroStrategy cofounder Michael Saylor, this shift will increase BTC’s dominance and capitalization to nearly 80% of the crypto market.
He also opined that regulatory clarity would boost Bitcoin adoption as it would address institutional investors’ misunderstandings and concerns about the crypto market.
Bitcoin’s Bull Flag And Price Changes
Bitcoin’s charts on the higher timeframe display a bull flag, predicting a comeback bounce. Bull flag patterns indicate the conclusion of a price after rising over its upper trendline, matching the earlier upswing.
Hence, Bitcoin’s bull flag projection is at $35,500, a fundamental support level in May 2021 and 2022. Accordingly, a bull cycle begins when Bitcoin trades above the $35,500 region.
However, a drop below a comparable neckline resistance will establish the inverted head and shoulder (IH&S), another bullish reversal pattern. The price usually climbs the same after breaking over the neckline in an IH&S pattern.
Nevertheless, BTC’s price may test the neckline support after the breakout attempt. If Bitcoin recovers from the IH&S neckline, it might surge towards the $40,500 region, roughly 60% above its current price, signalling a new bull cycle.