Bitcoin recorded considerable gains since the beginning of November 2024 as a result of the US presidential elections and the potential for a clearer regulatory framework in the future. The possibility of working with lawmakers that have a more crypto-friendly stance has given the market a much-needed boost, and the results are clear in the performance recorded by the BTC price chart. As of December 23rd, BTC stood above $95K, much higher than any of its previous all-time highs.
Investor sentiment is overwhelmingly positive as a result, but that doesn’t mean that sound strategies and game plans should be abandoned. In fact, it is more important than ever to approach the market cautiously during periods of heightened volatility as the current one, because losses are all the more likely as a result of FOMO and impulsive decisions.
The breakout
When it comes to predictions in the cryptocurrency space, you can expect a wide range of opinions. There are many researchers and investors who will give their views about a market’s performance, as well as their beliefs about its future evolution. These estimations influence the transactions investors will perform and can make or break their portfolios since these movements are an integral part of the strategies investors come up with. That is why it’s essential to look for predictions that are backed by analysis and objective data before making a choice. One of the metrics that has been of particular importance for traders recently is open interest.
It is typically used to measure the liquidity and interest of an asset, with surges typically indicating imminent breakouts. The open interest connected with the futures has climbed to new all-time high levels, signifying that the demand for BTC is on the rise. The Bitcoin open interest has a new all-time high of over $40 billion across all exchanges, a figure that surpasses the previous all-time high of $39.46, which was reached in July. These numbers indicate a breakout, especially when paired with other indicators, is imminent. One of them is the number of short-term holders, 75% of which have been recording steady profits since July 24th.
This will naturally translate into more upward momentum for Bitcoin and stronger performance. Short-term traders have often been used to determine the extent of retail demand for BTC. Market cap levels have also been increasingly steep, which is no small feat considering that BTC is already the coin with the largest capitalization level in the cryptocurrency world. Over the next few months, it is very likely that Bitcoin will continue to reclaim even more of the market share.
Support level
Bitcoin reached $75K in the aftermath of the United States presidential elections. The win of the Republican candidate and the election of many crypto-friendly officials has been unanimously regarded as a positive thing for the marketplace, and investors are eager to see where the ecosystem will go next. However, it is as important as ever to keep in mind that volatility is one of the central characteristics of the Bitcoin trading environment, and that in order to maintain profitability it’s important to monitor these shifts very closely and avoid the pitfalls of FOMO.
Nonetheless, it’s essential to remember that the price action will naturally depend on inflows as well, with the ETF ones being of particular importance since this new asset class has attracted a lot of hype even before its official approval. So far, performance has been overwhelmingly positive, so it’s not far-fetched to expect the trend to continue in the future as well.
Macro summer
We’ve already determined that the summer of 2024 hasn’t been the best time for cryptocurrencies, including Bitcoin itself. But things might soon change as investors believe the market is showing signs of evolving into a macro summer. This period typically occurs when a business cycle reaches the bottom and then starts to rise again in the aftermath of the Financial Conditions Index. This year, the macro summer could bring a considerable rally for Bitcoin as well, allowing it to consolidate its position even further.
The rally could extend well into 2025 as well, according to the initial research and metrics. Alongside Bitcoin, gold might also be on its way to a price breakout. There’s no wonder why the two assets have often been discussed together when it comes to price changes and trends. Bitcoin even earned the moniker “digital gold” due to its high value and ability to act as a store of value, characteristics that make it similar to its predecessor. According to a recent analysis, if Bitcoin manages to sustain its momentum and starts growing as a result of the macro summer, it could soon enter the Banana Zone as well.
This is a term that was coined by a crypto exchange founder and refers to a period during which upward movements are very strong.
The bottom line
Bitcoin had to deal with some difficulties during Q2 and Q3 of 2024, but it is still the uncontested king of crypto. Most investors are convinced that BTC is ready to leave this slump behind and that it is ready to grow considerably in the near future. It has the potential to break its own records and reach a new all-time high, making history once again as the most important cryptocurrency on the market. When Bitcoin performs well, it is very good news for the entire crypto ecosystem, as the altcoins always get a boost when BTC is doing well.
The market currently has the right conditions for further growth. Investors must be careful during this time and handle their portfolios with the utmost care and attention. It’s easy to get caught in the fear of missing out and fail to make sound choices when it comes to buying, selling, or trading, especially when the market is going through an upward trend. However, being careful, patient, and well-prepared is the best way to ensure consistent revenue.
