The price of bitcoin (btc) is currently showing a major bullish trend and shows no signs of slowing down. The cryptocurrency has already begun its fifth bull runwith impressive price targets planned for next year.
A recent report by Matrixport highlights btc‘s history of four distinct bull market cycles, each driven by a unique narrative. However, the latest bull market, which began on June 22, 2023, stands out for its main driving force: institutional adoption.
According to the report, this increase in institutional interest can be attributed to the characteristics of bitcoin, traditionally associated with safe haven investments such as gold, as well as growing concerns about the United States’ debt-to-GDP ratio. The Matrixport report predicts that the price of bitcoin could reach an impressive $125,000 by December 2024.
Rising bitcoin Price Aligns With Rising US Debt
Matrixport suggests that its emergence as a new payment mechanism fueled the first bitcoin bull market in 2011. The second cycle was fueled by China, where bitcoin gained recognition as an alternative form of money.
The rise of initial coin offerings (ICOs) marked the third cycle, providing a novel means of establishing and financing businesses. The fourth cycle saw the summer of decentralized finance (DeFi) and the nft craze dominating the market.
However, according to the report, the current bitcoin bull market is driven by institutional adoption. Institutions are considering bitcoin to diversify their asset allocation due to its similar characteristics to safe haven investments.
Notably, the rise in bitcoin‘s value coincides with the United States’ rising debt-to-GDP ratio, making it an attractive option for institutions looking to hedge against potential economic instability.
Based on historical price signals, Matrixport estimated that the price of bitcoin could reach $125,000 by December 2024.
Interestingly, the report suggests that the start of this bull market was officially recognized when btc hit a new one-year high on June 22, 2023.
Additionally, Matrixport advises that the optimal entry point for purchasing bitcoin is ideally between 14 and 16 months before the next halving event. The report suggested that late October 2022 was an opportune time to enter the market when bitcoin was trading at $17,000.
Possible btc correction on the horizon?
Despite the commotion surrounding the current experienced bullish trend for most cryptocurrencies on the market, cryptoanalyst “crypto Soulz” presents a contrasting view about the future of the price of bitcoin.
In a recent analysis of X (formerly Twitter), the analyst provides several reasons to consider a short position in btc. According to crypto Soulz, the next significant resistance level is at $37,330, but Soulz doubts the possibility of retesting it under current market conditions.
bitcoin recently hit a local high of $35,300, leading crypto Soulz to believe a price drop could follow. The analyst emphasizes retesting the $31,500 level as crucial support, which bitcoin did not revisit during the recent price surge.
crypto Soulz notes that spot and perpetual contracts increased during the pump, indicating possible market instability. Additionally, the futures market saw significant selloffs during the rally, similar to previous selloffs in January and August.
When examining the clearance heat map, crypto Soulz identifies liquidity below the current price, implying a possible downward movement. Soulz targets specific liquidity pools at $32,300 and $30,800 as potential areas for price decline.
Based on its analysis, crypto Soulz expects bitcoin to “cool off” from its current levels and aim for lower prices.
At the time of writing, the price of bitcoin is currently at $34,000, experiencing a 2.5% retracement in the last 24 hours.
Featured image from Shutterstock, chart from TradingView.com
