Bitcoin (BTC) has made a remarkable comeback, surpassing the $46,000 mark for the first time since its debut trade on January 11. This surge in price indicates a positive start to the year 2024. According to Coingecko, BTC saw a 3.4% increase in value within the previous day, reaching $46,075 at the time of publication. This upward trend has been consistent over the past seven days, with a 6% increase in value.
The initial months of 2024 were challenging for Bitcoin, despite the approval of several eagerly awaited exchange-traded funds (ETFs) geared towards strengthening its institutional legitimacy. However, the recent surge in price has brought renewed hope for early investors in the BTC ETF. Laurent Ksiss, a specialist in crypto Exchange-Traded Products (ETPs) at CEC Capital, suggests that breaking the $45,000 mark could bring these early investors close to profitability. However, he also warns that some investors may take profits, potentially triggering a reversal and a test of the $42,000 to $40,000 level.
January saw the introduction of 10 ETFs, but Bitcoin experienced an unexpected decline in value. The drastic drop occurred when Grayscale, one of the funds, converted its Bitcoin Fund ETF into an open-ended fund. Prior to the conversion, investors were required to hold their shares for a minimum of six months before cashing out. As soon as it became an ETF, many investors rushed to redeem their shares, leading to significant sell-off by Grayscale. This resulted in a drop in Bitcoin’s price, briefly trading below $39,000.
Fortunately, it seems that the sell-off has come to an end, and Bitcoin is once again on the rise. This upward trajectory can be attributed to large holders acquiring the asset, contributing to its increasing value in the market.
Markus Thielen, head of research at Matrixport and founder of 10x Research, predicts that Bitcoin is heading towards $48,000 in the near future. He bases his prediction on the historical trend of Bitcoin’s gains during the Chinese New Year festival. According to Thielen’s research, Bitcoin tends to rise by more than 10% around the Chinese New Year, which begins on February 10. The days leading up to the festival are statistically significant, as traders who acquired Bitcoin three days before the start and sold it 10 days later have witnessed price increases over the past nine years.
Additionally, LMAX Digital anticipates continued growth for Bitcoin, potentially reaching the $50,000 mark. Based on technical analysis, Bitcoin has broken out of a range and may be aiming for a surge to a new yearly high beyond $50,000. Using Elliott Wave theory, which suggests that price trends move in recurring wave patterns, Thielen predicts further upside for Bitcoin. He believes that Bitcoin has entered its final, fifth impulsive stage of its rally and could reach $52,000 by mid-March after correcting to $38,500.
Bitcoin’s recent surge above $46,000 marks a positive start to 2024. Despite the challenging beginning, the approval of ETFs and the growing institutional legitimacy of Bitcoin have contributed to its recovery. Furthermore, the support of large holders and the upcoming Chinese New Year festival indicate that Bitcoin’s upward momentum may continue in the near future. However, as with any investment, it is essential to conduct thorough research and analysis before making any investment decisions.
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