5 things to know in Bitcoin this week
Bitcoin (BTC) will start 2024 160 percent higher than it was a year ago — and the biggest news event of the year is likely to end in days.
BTC's price strength remained firm at the close of the yearly candlestick, with no last-minute volatility disrupting the plans of bulls and bears.
What's next? The first half of January is set to be unlike any other in Bitcoin history – the deadline for approval of the United States' first exchange-traded fund (ETF) is here.
Opinions on how markets will react to the decision – good or bad – are mixed.
Some believe that the green light will open the flood of institutional investment capital and as a result Bitcoin will never be the same. Others see the ETF launch as a mixed blessing in the end and that the immediate response to the green light will be a rapid resurgence in BTC prices.
Two more important countdowns in the next 4 months tonight #Bitcoin ETFHalving
brand new
— James Van Straten (@jimmyvs24) December 31, 2023
2024 is set to be significant throughout — just four months away from Bitcoin's next block grant halving, and on-chain data shows how miners are preparing for a shock to the system.
Network fundamentals are starting the year right – the data this week saw a 1.5% increase in the problem, which took it to new all-time highs.
That could easily change, however, as ETF tensions continue to mount — a rejection, after all, is not out of the cards, but one that many have begun to forget.
Will BTC be released on Bitcoin ETF license?
As 2024 approaches, New Year's fireworks have disappeared from BTC's price action – BTC/USD greeted the New Year in an established trading range.
The start of the new 12-month candle went unnoticed, with data from Cointelegraph Markets Pro and TradingView offering a modest upside at $43,000.
Volatility could have easily changed the mood in the near future, but as with the Christmas season, no big trend was on the table.
Analyzing how the first weeks of the year may unfold, market participants pointed out that the lack of continued volatility could lead to a crash around the ETF decision. Among them is prominent businessman and social media analyst Matthew Hyland.
Just guessing next 10-14 days for #BTC to enter ETF pic.twitter.com/DQNVTIwEJ0
— Matthew Hyland (@MatthewHyland_) December 31, 2023
Prominent crypto trader Tony wrote in part of his year-end analysis on X (formerly Twitter): “I think we're going to form a congruent triangle in the next few weeks and I think we're going to be able to break out of that.”
Crypto Tony, like many others, adds that altcoins are now getting more attention than BTC as the latter's dominance of the crypto market begins to wane.
As Cointelegraph reports, this is a common occurrence during early Bitcoin bull markets – an initial push against BTC gives way to large-caps, then small-cap altcoins.
Last month, Hyland saw the event playing out according to the plan, as confirmed by personal comments to Cointelegraph.
“Dominant weekly declined and closed below support,” continued the latest X content overnight.
“The collapse of dominance is one of the most bleak signs for the crypto market and Bitcoin.”
“This is when the climb to the top of the cycle really starts,” Hyland added.
The Bitcoin ETF approval window begins this week
There is one thing and one thing on every crypto investor's mind this month: the US spot Bitcoin ETF approval deadline.
Because of January 10, this momentous occasion has been mired in controversy for years.
The shocks continue into the new year — from industry changes to constant meetings with U.S. regulators, the ETF's path forward has no sense of what's ahead of it.
A lot of nerves around the last time. A common narrative calls for the announcement to create a “sell the news” event, in which Bitcoin immediately collapses in anticipation of unknown drains.
According to Cointelegraph, targets for this scenario mostly fall to $36,000, while others see a more extended downtrend starting this month.
Among them is the famous Il Capo of Crypto, who still sees $12,000 as a realistic BTC price level in the medium term.
“We expect volatility and a correction in mid-Q1 2024,” trading group Stockmoney Lizards said in part in its annual forecast released on December 31.
Stockmoney's lizards, which have received one of the most positive BTC price outlooks in recent months, have yet to hit a new all-time high before the end of 2025.
“We have also taken into account macroeconomic conditions (recession, inflation). However, this is ultimately not a bad thing for Bitcoin,” he continued.
“Many people see (and will see after mass adoption) Btc as ‘digital gold' and a store of value in bad economic times. So we don't believe the current bull run will end anytime soon.
Markets: Fed “pivot” months away
On the topic of macro waves, the first week of the year offers some welcome calm as Bitcoiners focus on ETFs.
US data releases are sparse, with the first phase of the year – the Federal Reserve's interest rate decision – only coming at the end of the month.
Inflation is trending lower, and a look at market expectations shows increasing preparations for the Fed's “pivot” – the start of unwinding two years of interest rate hikes.
According to data from CME Group's FedWatch Tool, the odds of that happening this month are low but more than 15 percent. Most likely, the markets say, the current levels will remain until March.
Jim Bianco, head of institutional research firm Bianco Research, looks at the implications of the US presidential election as he considers how the rest of 2024 could play out.
“Since 1994, the Fed has clearly targeted the rate,” the X Commentary said.
Bianco highlighted 1996, 2008 and 2020 as key years in the interim period.
“So the reductions in presidential election years over the last 30 years are because everything is ‘hitting the fan' and the Fed is forced to act,” he said.
“If a ‘soft landing' does happen, will it be enough for several rate cuts in an election year? Or will the federation be forced to sit down?”
When does the Fed cut rates in a presidential election year?
Since 1994, the Fed has clearly targeted its monetary policy.
2020 – Raised to zero in February in response to the pandemic/lockdowns.
2008 – Reduced from 4% to zero in response to the global financial crisis
1996… https://t.co/b34qeq05Tb
— Jim Bianco (@biancoresearch) December 27, 2023
As Cointelegraph reports, Bill Ackman, CEO and founder of hedge fund Pershing Square Capital Management, previously predicted that rate cuts would begin in Q1.
All-time highs come for Bitcoin fundamentals
The fundamentals of the Bitcoin network are starting 2024 in exactly the same way as last year – in “only on” mode.
The upcoming fix will bring competition between miners to an unprecedented level. Data from the monitoring resource BTC.com increases by 1.5% to 73.1 trillion.
December was already a rough month for mining earnings. Regular payouts have helped push the multi-year average significantly higher, leading daily earnings to rise above 1,500 BTC on December 16.
Half will be on every mining radar; In April, the block subsidy will drop 50% overnight to 3.125 BTC per block.
As evidenced by Glassnode data from Chain Analytics, miners have been taking profits in the near-yearly period. Since mid-October, the balance in mining wallets has decreased by around 12,000 BTC.
“Greedy” start of the year
On top of all this, the sentiment of the crypto market – the general assessment of the behavior of each hodler – is cautious.
Related: Bitcoin Price Stalls As UNI, NEAR, OP & INJ Project Major Price Action in 2024
“Greed” is what defines the average crypto investor at $43,000, according to the Crypto Fear and Greed Index.
Known as a scale for measuring outright depression at the bottom and “irrational happiness” at the top, Fear and Greed currently sits at 65/100.
The index has shown to be highly sensitive to BTC price action in its current range. Even small movements in BTC/USD can cause a significant change in sentiment, indicating that the market's upswing will not last long as it quickly turns to “extremely greedy”.
So far, however, the local high around 75/100 — last seen at Bitcoin's 2021 all-time high — has served as a ceiling.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
