Cryptocurrency, specifically Bitcoin, exhibits notable expansion, last observed in 2020.
Cryptocurrency Markets Resurrect Interest in Bitcoin: Signs Point Towards a Potent Rally
It's a crypto revival as eyes turn back to Bitcoin, with financial analysts predicting we may be on the brink of a monumental rally, reminiscent of the one witnessed before 2020.
Swan Finance's May 3rd report indicates, "The most promising chart for Bitcoin has formed since 2020."
First up, we have gold - the safe-haven investment of choice, surging by 30% since the year began and soaring to $3,400 per ounce on April 22nd only to retreat a mere 3% this week, whilst Bitcoin basks in a rise of about 4%. Analysts at Swan remark, "When Bitcoin surpasses gold, this generally signals the start of a larger movement." Recollecting the previous trend, BTC ascended from $70,000 to $108,000 in due course.
Greenbacks Flooding, Market Sizzling
The second indicator is an unfolding surge in the global money supply. For the first time since 2021, M2 money supply is gaining traction. According to data from the St. Louis Fed, M2 money supply has increased by 4% in the past 12 months. Analysts comment, "Each major Bitcoin revolution has kickstarted with an expanding money supply, improved financial conditions, and a decline in confidence in paper currency, establishing a favorable landscape for Bitcoin."
Volatility Increasing, Caution Advised
Market volatility is another factor that demands attention. As volatility intensifies, nearing March 2020 levels, uncertainties mount. Although the CBOE Volatility Index (VIX) dips, the market remains skittish. Timothy Peterson explains that the VIX fell from 55 to 25 over the last 50 trading days, and if it drops further, below 18, "risk appetite" may once again be boosted, potentially fostering a positive ambiance for assets such as Bitcoin.
Peterson's model, extraordinarily accurate at 95%, suggests the BTC price could reach $135,000 within the next three months.
Technical Indicators: Ready for the Rally?
Swan analysts insist that the MVRV ratio has exceeded the 1.74 threshold, a level statistically associated with major Bitcoin rallies. Moreover, analysts highlight a waning of selling pressure in the $90,000-100,000 range, the exit of weak hands from the market, and the price breaching its cost basis. Based on Peterson's analysis, each 25 basis point increase in interest rates corresponds to approximately a 10% surge in Bitcoin price. Taking into consideration the possibility of a 75 basis point interest rate cut within the next 1-2 months, reaching Bitcoin's $130,000 level could be a plausible scenario.
Bitcoin gained more than 15% over the past month and tested above $98,000 on Friday, marking its highest level since February 21.
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Enrichment Data:
- Institutional Demand: Renewed institutional demand and increased corporate treasury adoption due to economic shifts and the waning trust in traditional assets are significant drivers for Bitcoin's potential growth in the 2025 market. This trend reflects the escalating institutional adoption witnessed prior to the 2020 rally.*
- Regulatory Climate: Whilst regulatory uncertainties still persist, the current atmosphere favors Bitcoin compared to the more restrictive conditions that slowed previous rallies. This is due to increased awareness, greater adoption, and maturing regulatory frameworks within the crypto industry.*
- ** halving mechanics.* The twelfth Bitcoin halving in a cycle that began in 2009 has the potential to exert a substantial impact on the market, as reduced Bitcoin issuance can trigger price appreciation due to increased scarcity and limited supply.
- In the backdrop of renewed interest in Bitcoin, analysts at Swan Finance suggest that the blockchain technology-based cryptocurrency could be on the brink of another monumental rally, with the MVRV ratio exceeding the 1.74 threshold, a level statistically associated with major Bitcoin rallies.
- As market volatility intensifies, approaching March 2020 levels, analyst Timothy Peterson's model indicates that the BTC price could reach $135,000 within the next three months. He explains that a further drop in the CBOE Volatility Index (VIX) below 18 may once again boost risk appetite, potentially fostering a positive environment for Bitcoin.
- The unfolding surge in the global money supply, improved financial conditions, and declining confidence in paper currency have historically provided a favorable backdrop for Bitcoin, as each major Bitcoin revolution has kicked off with an expanding money supply, as explained by analysts.
- Bitcoin gained more than 15% over the past month and tested above $98,000 on Friday, marking its highest level since February 21. This rise comes amidst increased institutional demand and renewed interest in Bitcoin, as more corporates adopt Bitcoin as a treasury asset in response to economic shifts and waning trust in traditional assets.
