Bitcoin Price Finally Ignites to Align with Booming Stocks

With Equities and gold booming following this week’s historic rate cute, Bitcoin is finally showing signs of life as well, moving up to $63,000.

Equities and gold both saw upward movement, with the S&P 500 nearing new all-time highs, and Gold already hitting new ATHs, while BTC/USD finally started progressing toward the next level of resistance, around $64,000.

Source: BNC Bitcoin Liquid Index

Amid mixed flows for US spot Bitcoin exchange-traded funds (ETFs) throughout the week, new data revealed a potential shift in institutional behavior.

Ki Young Ju, founder of on-chain analytics platform CryptoQuant, shared data on X, showing a dramatic reduction in institutional BTC shorting.

“Institutions are no longer aggressively shorting Bitcoin,” he remarked, accompanying a chart showing CME Group Bitcoin futures net positioning.

“CME futures net positions have declined by 75% over the past five months.”

Bitcoin (BTC) has been locked in an energy sapping, multi-month consolidation since reaching $73,000 in March, leading some to believe that the market top had already passed.

However, BTC’s current price action mirrors its behavior in previous market cycles, which ultimately resulted in significant upward movement toward the end of the year. This pattern suggests a potential breakout to new record highs in the coming months. A big Q4, in other words. A banger of an end to the year, with perhaps, more to come in 2025, even.

Despite Bitcoin’s underwhelming performance since March, it is still up 290% from its November 2022 market low, aligning with the gains seen during the previous two bull markets, according to data from Glassnode.

In comparison, BTC advanced 309% during the 2015-2018 bull run and 251% in the 2018-2022 cycle. On both occasions, the steepest rallies occurred later in the cycle, leading up to the market top. If BTC follows the trajectory of previous cycles, it could surge by 600% to 900% from its cycle low, potentially reaching prices between $108,000 and $155,000 by year-end.

This year’s correction also echoes Bitcoin’s price behavior during its previous two halving years. In both 2016 and 2020, BTC reached mid-cycle peaks, followed by months of sideways action before breaking higher in the later months of the year, according to the pseudonymous crypto analyst CryptoCon.

The halving event, which occurs automatically every four years and reduces the issuance of new tokens by 50%, is believed to create scarcity and impact Bitcoin’s supply.

In 2016, BTC dropped more than 40% from its June intermediate cycle top before surging in December. In 2020, it saw a decline of around 21% from an August peak before making new highs in late October. In both cases, the real fireworks occurred in the following year, when BTC hit its market cycle top.

This year, Bitcoin reached a local peak of $73,000 in March before declining by as much as 33% to an early August low. As CryptoCon noted, BTC is nearing the end of its typical mid-cycle correction.

The trader wrote, “This entire year Bitcoin has been following 2023 but one month ahead which puts the huge breakout month at an odd time… this month. I’ve reserved my expectations but price is starting to enter the surge box… Once Bitcoin escapes to new ATHs, you’ll see what kind of boom 6 months+ of sideways price action can bring.”

Source:  CryptoCon