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| | Learn how to make AI work for you. | AI won't take your job, but a person using AI might. That's why 500,000+ professionals read The Rundown – the free newsletter that keeps you updated on the latest AI news and teaches you how to apply it in just 5 minutes a day. | Sign up. | 👇1-12) In October 2022, we predicted that Bitcoin would start rallying and reach 63,000 by March 2024 (here). Our analysis could not have been more accurate and was based on our quant model, which identified the ideal entry and exit periods and provided guidance along the way. | 👇2-12) Similarly, we predicted the 45,000 price target by the year's end in Jan 2023 (here) and a Bitcoin rally to 57,000 post-ETF approval period (here). Based on our quant models, the rally to 63,000 was a natural progression. | What is our model NOW predicting? | 👇3-12) For any prediction, there is time (when) and space (how high or low), and analysts should never predict both as the chance of being wrong with one of these factors is high. We are traders and develop hypotheses based on the hedge fund quant models we have developed and worked with. Timing and targeting the right levels is crucial. | Today, we focus on the 'when' – in a later report, we focus on 'space.' | 👇4-12) The funding rates are elevated, and futures positioning has dramatically increased. In a normal market situation, this would likely result in – at least – a Bitcoin price consolidation until those extremes are worked off. But the dynamic is (un)predictable ahead of the halving, especially when a large new buyer (the Bitcoin Spot ETF) has entered the market. | 👇5-12) While initially, the buying mainly occurred during US trading hours, we are seeing a dramatic increase in trading volumes in Asia. Notably, trading volumes in Korea exploded from a sleepy $1bn to $8bn in three days. This could also cause Bitcoin to jump outside of US trading hours. | 👇6-12) Most ETF buying occurs during the first three trading hours of the day, with a lack of buying during the last two trading hours of the day. This would signal typical retail traders' behavior as they tend to execute early in the trading session. At the same time, institutions are more focused on closing prices; hence, the volume for institutions tends to increase during the last hour (relative to retail). | | 👇7-12) Retail traders are also less price-sensitive, which explains how Bitcoin jumped almost in a straight line from 52,000 to 63,000. But the institutions are coming; there is no doubt about it. Not only is BlackRock actively marketing their Bitcoin ETF and explaining to institutions the benefits of adding Bitcoin to their portfolio, but we are also hearing the same from Morgan Stanley and others. | Analyzing past halving cycles reveals two crucial factors: | 👇8-12) Bitcoin miners tend to restrict supply to exchanges, and this causes a short- to medium-term imbalance in the market. The result is the predictable rise in Bitcoin prices. Previously, we noted that the ETFs are buying 9,000 Bitcoins per day while the miners are only rewarded 900 new Bitcoins daily. Demand vs. Supply imbalance at an extreme. | 👇9-12) The thought process here is that miners want to build inventory and then manage their profitability curve by gradually selling those Bitcoins after the halving when their rewards are cut in half. This offsets their cliff revenue curve when they only receive half the mining rewards. | 👇10-12) This year will be no different. We assume miners are restricting supply even more as they have access to capital markets and can fund their operations through debt and share offerings instead of touching their Bitcoin inventory. Marathon announced they sold 56% of their mined Bitcoin last quarter; the rest is inventory build-up. | | 👇11-12) The other interesting fact is that the halving signals that the bull market is only halfway through. The chart below shows when we came up with our 63,000 price target in October 2022 – exactly when the green line started. The orange bars show the halving cycles, and if history is any guide, Bitcoin never peaked when the halving occurred. | 👇12-12) The chart clearly shows this current Bitcoin rally is only halfway through the typical bull market. As Bitcoin cycles are nearly perfectly symmetrical, we expect this Bull market to last for an equal amount. This would project a peak between April 2025 and September 2025. | In a later report, we will reveal our price prediction for the top of this bull market. | | | | | | | | | | | |
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