4 Factors Driving the Next Bitcoin Bull Market

Bitcoin (BTC) has plummeted almost 15% from its yearly peak of around $31,000, due to the recent regulatory actions taken against Coinbase and Binance cryptocurrency exchanges and the Federal Reserve’s firm forward guidance, which has caused its value to plummet.

Despite this, Bitcoin has increased 60% since the start of the year, maintaining a technical support level of $25,000. Additionally, the start of a new bull cycle could be sparked for a variety of reasons.

Bitcoin halving

The pre-programmed event of halving Bitcoin’s supply rate every four years is scheduled to happen in April 2024.

The three prior Bitcoin halvings (2012, 2016, 2020) have all been followed by significant BTC price surges and new record highs. As an example, BTC has increased by 276% since the last halving in May 2020.

Analyst Lark Davis believes that the market will remain in an accumulation phase until the Bitcoin halving, and expects the price of Bitcoin to reach its all-time high of $69,000 in the next 1.5-2 years. Another analyst even predicts the price to reach $160,000 by April 2024.

Cathie Wood is optimistic about the potential of Coinbase stock and expects that Bitcoin will reach $1 million.

BlackRock Bitcoin ETF

The filing of BlackRock’s Bitcoin ETF application to the U.S. Securities and Exchange Commission (SEC) has also increased optimism for a potential BTC price surge in the days before the halving.

The investment firm, which oversees $8.5 trillion in assets, boasts an almost flawless record of ETF authorization from the SEC. The SEC has until March 2024 to answer BlackRock’s request, a month prior to the halving.

Several analysts argue that an SEC approval could potentially double Bitcoin’s positive outlook following the halving.

“Analyst Crypto Tea is demonstrating the application of game theory,” noting, “You are watching game theory at work.”

Bitcoin dominance rising

The SEC’s recent action against crypto exchanges Binance and Coinbase has caused a lot of pressure on top altcoins, particularly those classified as “unregistered securities.” This has happened at the same time that Bitcoin’s crypto market dominance has exceeded 50% for the first time in two years.

In other words, investors are transferring funds from altcoins to Bitcoin since the SEC does not classify the latter as a “security”. Consequently, BTC could be perceived as the “safer” option when compared to the more than sixty cryptocurrencies deemed to be “securities” by the regulator.

Michael Saylor, co-founder of MicroStrategy, predicts that in the upcoming years, Bitcoin’s market capitalization will reach 80% of the entire crypto market. He declared:

BTC price “bull flag”

Technical analysis indicates that Bitcoin is exhibiting a bullish flag pattern on its long-term charts, indicating a likely further increase in price as part of its current upward trend.

A bull flag is concluded when the price surpasses the upper trendline and increases by the same amount as the preceding uptrend. Thus, the estimated target of Bitcoin’s bull flag is close to $35,500, which was a solid support in May 2021 and May 2022.

Bitcoin will need to close above $35,500 to start a bull cycle, since it would still be lower than the previous highs during the bear market.

Interestingly, BTC price could be on the verge of a breakout in its current inverse-head-and-shoulders (IH&S) pattern, as depicted below, occurring at the same time as the bull flag pattern.

An IH&S is a bullish reversal pattern that is indicated by the presence of three troughs below a shared neckline resistance. The middle trough is deeper in comparison to the other two, which have similar heights.

Generally, an IH&S pattern is solved once the cost surpasses the neckline and increases by the same amount as the space between the bottom of the center trough and the neckline. Occasionally, the price will go back to check the neckline as a form of support after the initial breakout attempt.

Approximately one-third of young Australians possess cryptocurrency even though they are considered to be ‘risk averse’ – according to an ASX survey.

Thus, a recovery from the IH&S neckline could lead to BTC price increasing to $40,500, representing an increase of over 60% from its current levels, thereby confirming a new bull market.