Examining the Potential Performance of Bitcoin at the End of the Year
05 Oktober 2024
Edit
Blockchainmedia - Bitcoin's potential performance at the end of 2024 continues to attract the attention of market players. Analysts predict that several global economic factors will play a key role in Bitcoin price movements in the last quarter.
One of the main catalysts in Bitcoin's performance this year was the launch of the Spot Bitcoin ETF in January 2024. According to analysis from Ecoinometrics, Friday (4/10/2024), ETFs are expected to continue to bring new liquidity to the crypto asset market, by increasing access for institutional investors.
"While this launch is a big moment, the long-term impact may be starting to subside," the analysis explains. After the launch of the ETF, the market seems to be looking for a new catalyst to drive stronger price movements later in the year.
According to them, the economic condition of the United States is also a factor that needs to be considered. If the US enters a recession in the 4th quarter of 2024, analysts predict that Bitcoin prices could be depressed due to a massive sell-off from investors looking for safer assets such as gold or bonds. However, the opposite scenario is also possible. If the US economy manages to avoid a recession and achieves a soft landing, Bitcoin is expected to experience significant increases.
"This soft landing will provide a positive boost to risk assets, including Bitcoin," added Ecoinometrics.
A soft landing in the context of the United States economy is a situation where the economy manages to slow down without falling into a recession. This is usually achieved when the Fed raises interest rates to control inflation, but does not cause a severe economic contraction or spike in unemployment. The aim is to reduce the rate of inflation while maintaining labor market stability and economic growth.
Another factor that could provide a big boost to Bitcoin is increased global liquidity. According to Ecoinometrics, if central banks around the world, including the Federal Reserve, loosen monetary policy by lowering interest rates or adding liquidity to the market, the price of Bitcoin could soar. Higher liquidity in financial markets usually drives investors to look for high-risk assets but with the potential for large returns, such as Bitcoin.
Bitcoin, as it did in 2020," the analysis said.
The Fed's monetary policy is also expected to be an important influence on Bitcoin's performance in the final quarter of this year. Today, the Fed is faced with the difficult task of balancing declining inflation without damaging the labor market. The latest data shows that US headline inflation fell to 2.3 percent, while core inflation fell to 2.7 percent. However, there are still concerns that if the Fed continues its monetary tightening policy excessively, this could trigger a weakening of the labor market which will have a negative impact on the crypto asset market.
"If the Fed manages to balance its monetary policy without reigniting inflation or damaging the labor market, Bitcoin could benefit from broader economic stability," said analysts from Ecoinometrics. However, if this balance is disturbed, higher volatility in digital asset markets could occur.
With global economic uncertainty still haunting the market, many analysts warn that market players must continue to be alert to developments in monetary policy and the latest economic data.
"Factors such as the Fed's policies, US economic conditions and global liquidity will play an important role in determining the direction of Bitcoin prices until the end of this year," stressed Ecoinometrics.
Ultimately, while there is potential for Bitcoin to achieve significant gains in the 4th quarter of 2024, the risks are also high. Market players are advised to continue monitoring developments in monetary policy and economic conditions that could influence the volatility of this crypto asset.
On Friday evening, the price of BTC was around US$60,800, up 1 percent in the last 24 hours. Previously, this crypto touched a local low of US$59,800 thousand on Thursday evening. The inevitable deep correction was 8 percent in the last week.
source : investing.com