Strong Indications Point Towards Most Optimistic Bitcoin Scenario Since 2020
Here's a fresh take on the topic:
Hey there! Bitcoin's future looks mighty fine, according to industry analysts at Swan Financial. On May 3, they claimed it could be the most bullish setup since 2020. Let's dive into why that's the case.
First off, gold, the traditional safe haven, has been on a wild ride since the start of the year. It surged an impressive 30% and hit an all-time high of over $3,400 per ounce on April 22. But, surprisingly, it's taking a breather now, falling around 3%, while Bitcoin is up about 4%.
"Every time Bitcoin starts catching up like this," the analysts said, "it's the start of something bigger." And they're not just talking about traffic, folks! The last time Bitcoin did this, its price shot from $70,000 to $108,000.
Now, let's talk about liquidity. The second signal here is a global increase in liquidity, specifically M2 money supply. It's rising for the first time since 2021, up by 4% over the last 12 months according to the St. Louis Fed. Sounds like we're swimming in cash, right?
Guess what? Bitcoin loves a good liquidity pool. Analysts argue that every major Bitcoin bull market follows this pattern: expanding money supply, improving financial conditions, and waning trust in fiat currencies. This surge in liquidity is a perfect fuel for Bitcoin to gobble up.
There's also been a significant spike in volatility, reaching levels last seen in March 2020. The CBOE Volatility Index (VIX) has calmed down since, but uncertainty remains, and markets are jittery like a kitten on a hot tin roof. But don't worry, Bitcoin thrives in chaos. It offers certainty, finality, and neutrality when everything else is breaking down.
Economist and author Timothy Peterson also chimed in, observing that the VIX has dropped from 55 to 25 over the last 50 trading days, indicating a "risk-on" environment that favors assets like Bitcoin. His tracking model, which is usually accurate 95% of the time, predicts a BTC price of $135,000 in the next few weeks if the VIX remains low.
The analysts also pointed out the MVRV ratio, a measure of market value divided by realized value. It just bounced off 1.74, which has marked the start of every major Bitcoin bull market, and it's flashing again now. Plus, they reckon sellers are running out of steam between $90,000 and $100,000, and the weak hands have cleared out. This structure historically signals Bitcoin is about to take off like a rocket.
Lastly, let's talk interest rates. Economist Timothy Peterson noted that every 25 basis point decline in rates equates to roughly a 10% increase in Bitcoin price. Given the speed at which this rate is falling, a 75 basis point decline is possible within one to two months, which would push Bitcoin towards $130,000.
So there you have it, folks! Bitcoin is on the move, and it's looking pretty good for investors. Keep an eye on those gold prices, volatility, and interest rates, and you might just catch this bull run in action!
- The analysts at Swan Financial believe that Bitcoin's price could potentially surge to levels last seen in 2020, raising hopes for a bullish setup in 2025.
- As the M2 money supply rises globally, Bitcoin may capitalize on the increased liquidity, reflecting a pattern indicative of major Bitcoin bull markets.
- The volatility in the market, currently peaking like levels last seen in March 2020, presents an environment that Bitcoin typically thrives in, offering certainty and neutrality during uncertain times.
- Economist Timothy Peterson's tracking model suggests a BTC price of $135,000 if the current low VIX levels persist, a scenario that aligns with industry analysts' predictions of Bitcoin prices nearing $130,000.
- To further support these predictions, the MVRV ratio has flashed its 'bull market' signal once more, while sellers seem to be running out of steam, pointing towards a potentially imminent spike in Bitcoin's price trajectory. Furthermore, experts link lower interest rates to a likely increase in Bitcoin's price, with a potential 75 basis point decline driving Bitcoin towards $130,000.
