Despite hitting new highs in 2024 and approaching the 2021 peak, Willy Woo, an on-chain analyst, maintains that the true bitcoin bull market has not yet begun. in a mail At
TradFi is “in for a shock”: analyst
Citing events in the bitcoin Macro Index, the analyst maintains that even if btc breaks records as it rises, it is not backed by “complete fundamentals.” This outlook is because btc prices remain below a crucial level in the index. If this level is exceeded, Woo warns, the traditional market will suffer “a shock.”
The bitcoin Macro Index is a composite indicator that considers macroeconomic and on-chain factors. While on-chain activities such as hash rate and transactions are crucial, bitcoin is now intertwined with the global financial system.
As such, the index was designed to provide a holistic preview of the bitcoin market, going beyond simple price movements. To ensure this is captured, the index integrates readings of macroeconomic data, including inflation, labor market conditions and interest rates, primarily from the United States.
Woo notes that although bitcoin prices are at record levels, the currency has yet to break through a key index level. Currently, the index is consolidating horizontally, moving away from the sharp rise in bitcoin prices.
However, this can change quickly if the index rises, depending on macro and chain events, including interest rate decisions in the United States.
With eyes on the Federal Reserve, will bitcoin hit all-time highs?
So far, eyes are on the US Federal Reserve (FED) and whether they will change their monetary policy from aggressive to dovish. Taking a dovish stance means the central bank will consider cutting interest rates from current levels.
Lowering interest rates often results in a more accommodative economy, with more capital in circulation. Historically, this tends to support cryptocurrencies and stocks.markets. The question, however, is whether or not the Fed will lower interest rates for the first time since the sharp rise throughout 2021 and early 2022.
Before the Federal Reserve decides on interest rates, btc continues to rally. Since mid-January 2024, following the approval of multiple bitcoin exchange-traded funds (ETFs), the industry has seen unprecedented capital inflows. Since then, BlackRock's product, IBIT, has received over $10 billion and could rise further as btc prices rise.
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