Could Bitcoin’s price hit $800,000 soon? Uncover the hidden clues and expert forecasts predicting a massive upsurge.
Bitcoin (BTC) once again made headlines last week as it crossed the $70,000 mark due to a surge in buying pressure.
On June 7, BTC reached a high of $71,907, just shy of the elusive $72,000 mark. This price level has proven to be a strong resistance point, as shown by a similar peak of $71,900 on May 21.
Despite these impressive gains, BTC has struggled to maintain its momentum, trading at $69,400 as of June 10, marking a 6% decline from its all-time high of $73,750, achieved on March 14.
What’s driving these fluctuations? According to a CoinShares report, crypto investment products saw nearly $2 billion in inflows last week, extending a five-week run to over $4.3 billion.
This surge in investment activity is reflected in the trading volumes of exchange-traded products (ETPs), which rose to $12.8 billion for the week, up 55% from the previous week. Notably, Bitcoin led this investment frenzy, with inflows of over $1.97 billion.
The regional data is equally telling. The U.S. dominated the inflow scene with $1.98 billion last week. Remarkably, the first day of the week recorded the third-largest daily inflow on record.
Meanwhile, short-Bitcoin products experienced outflows for the third consecutive week, totaling $5.3 million.
The substantial inflows and rising trading volumes suggest strong investor interest and confidence in Bitcoin’s potential. However, the resistance at the $72,000 mark indicates that the market is still testing the waters.
Where is Bitcoin headed next? Will it finally surpass the $72,000 resistance, or will we see more of the same volatility? Let’s delve deeper into this analysis and see what Bitcoin price predictions say.
Factors affecting Bitcoin price prediction
Macroeconomic triggers
External triggers, particularly from U.S. macroeconomic data, have shown they can flip Bitcoin’s path in an instant.
Hence, this week is crucial, with two key events dominating the scene: the Federal Reserve’s interest rate decision and the release of the May Consumer Price Index (CPI).
Why are these events such big deals? Well, the CPI release and the Federal Open Market Committee (FOMC) meeting are both scheduled for the same day. This creates what traders call a “double whammy” for market volatility.
Last week gave us a taste of how jittery the market can be. U.S. employment data came in much stronger than expected, and Bitcoin’s price dropped nearly 2% almost immediately.
Popular trader CrypNuevo outlined two possible scenarios for Bitcoin’s reaction to the upcoming data.
In Scenario 1, Bitcoin might recover from last week’s drop at the start of this week, consolidate until the FOMC announcement, and finally adjust based on what the Fed says.
In Scenario 2, the FOMC might directly counteract last week’s drop, with Bitcoin simply consolidating and sweeping lows until then.
Despite the buzz, market expectations for Fed policy changes have remained consistent.
According to CME Group’s FedWatch Tool, it’s widely believed that the FOMC won’t cut rates this month. It might take several more meetings before the Fed follows other central banks in cutting rates.
June 13 is another day to mark on your calendar. The U.S. will release the Producer Price Index (PPI) along with weekly jobless claims.
As CrypNuevo pointed out, economic data often causes immediate market reactions, but these moves tend to get retraced later on, just like we saw with last week’s employment data.
Ricardo Salinas Pliego’s endorsement
Ricardo Salinas Pliego, a Mexican entrepreneur with a fortune worth over $14 billion and owner of Salinas Group, has long been a vocal supporter of Bitcoin.
Recently, he advised his followers on X to buy Bitcoin and capitalize on its appreciating value.
His advice comes at a time when the Nigerian currency has become the worst-performing against the U.S. dollar, prompting government measures to stabilize it, including crackdowns on crypto operators.
Salinas Pliego’s endorsement is not new. Back in 2021, he declared his allegiance to Bitcoin, describing it as “gold for the modern world” and advocating its “extraordinary properties.”
He even mentioned working towards making Banco Azteca, his bank, the first institution in Mexico to accept Bitcoin.
Moreover, in 2022, he hinted that Elektra Group, a chain of department stores under Salinas Group, might start selling Bitcoin merchandise.
Spot BTC ETFs absorbing new supply
Another key factor currently shaping Bitcoin’s price is the surge in demand driven by spot BTC ETFs in the U.S.
According to data from HODL15Capital, in the first week of June, these ETFs acquired 25,729 BTC, equivalent to about two months’ worth of newly mined Bitcoin.
This purchase volume, totaling approximately $1.83 billion, is nearly eight times the 3,150 BTC mined during the same period.
The substantial inflows into Bitcoin ETFs, which have amassed $15.69 billion in net inflows since their January launch, suggest the strong demand and growing institutional interest in Bitcoin.
Remarkably, Bitcoin ETF assets under management (AUM) have already reached about 60% of the AUM of gold ETFs, despite Bitcoin ETFs being in existence for only five months compared to gold ETFs’ two decades.
Something big is cooking up
Amid this recent bull market, the current buzz is all about the massive $12 billion worth of Bitcoin shorts up to $74,000, as highlighted by Oliver L. Velez in his recent X thread.
Other analysts on X have also shared the same opinion, and are expecting a big move.
According to Oliver, Wall Street firms are diving into the Bitcoin market with large short positions, but this isn’t necessarily a bearish move. Instead, it’s a strategic play involving hedging and capturing premium spreads by selling Bitcoin futures while buying spot Bitcoin.
So, what does this mean for the market? To understand, let’s break down the mechanics.
When institutional investors short Bitcoin, they sell futures contracts, betting that the price will drop. However, they simultaneously buy spot Bitcoin, hedging their risk.
This dual strategy allows them to profit from the price difference between the futures and the spot market. But here’s where it gets interesting: Oliver predicts that these strategies might lead to the bankruptcy of some major Wall Street firms.
Why? Bitcoin doesn’t conform to traditional market rules, such as upper and lower circuits. In traditional stock markets, upper and lower circuits are mechanisms that halt trading if a stock’s price moves beyond a certain percentage in a day, preventing extreme volatility.
However, Bitcoin lacks these controls, allowing for unrestricted price movements. The high leverage often used in Bitcoin trading means that even slight market fluctuations can result in substantial losses.
If Bitcoin’s price surges instead of dropping, these firms will face enormous losses, potentially leading to a short squeeze—a situation where short sellers are forced to buy back Bitcoin at higher prices to cover their positions, driving the price even higher.
Historically, short squeezes have led to dramatic price increases. For example, in early 2021, GameStop’s short squeeze saw its stock price skyrocket from $17 to over $480 within weeks. A similar scenario in the Bitcoin market could send prices soaring, creating wild volatility.
The bottom line is that while Wall Street firms are engaging in sophisticated trading strategies, Bitcoin’s unique nature makes it a risky game. The potential for massive gains exists, but so does the risk of catastrophic losses.
What to expect next and Bitcoin price prediction
As we look ahead, the buzz around Bitcoin isn’t just about its current state but where it’s headed.
With Bitcoin consolidating between crucial levels, a breakout at $71.7K could be massive, as suggested by Michaël van de Poppe, a prominent crypto analyst. However, it’s standard to be conservative during CPI week, as macroeconomic factors play a key role in price movements.
Meanwhile, according to Ali, another known analyst, short-term holders are enjoying a profit margin of 3.35%, indicating minimal risk of a significant sell-off and hinting that Bitcoin might be gearing up for a substantial move.
Another analyst suggests that historically, Bitcoin has exhibited similar patterns to those observed between 2018 – 2021 and even 2014 – 2017, suggesting a BTC price prediction of $80,000 in the short term.
Other Bitcoin price predictions suggest that Bitcoin could outperform any other asset in the next 12-18 months, with a conservative target of $170-180K in the worst-case scenario.
When we extend our horizon to the long term, the Bitcoin crypto predictions become even more fascinating. PlanB’s Stock-to-Flow (S2F) model, a widely followed forecasting tool, provides a bullish scenario for Bitcoin over the next few years.
According to this model, Bitcoin’s price prediction for 2024 is $150,000, with a potential Bitcoin price prediction for 2025 at $800,000. The model suggests a more moderate correction in subsequent years, with Bitcoin stabilizing around $400,000 by 2026-2028.
In the short term, it’s essential to watch for a breakout above $71.7K, which could signal a key upward move. Hence, you should remain informed and cautious and keep in mind that these predictions and forecasts often go wrong.
As always, thorough research and a balanced approach are crucial. While the future of Bitcoin looks promising, the journey will likely be filled with ups and downs. Stay informed and never invest more than you can afford to lose.
Credit: Source link
