The most recent report from 10x Research suggests that Bitcoin may be on the brink of a substantial rally by the end of 2024 while cautioning on potential risks of investing.
The report emphasizes the volatility of the year thus far. However, it also explores a paradigm shift in the context of the cryptocurrency market’s seasonal patterns and the combination of forces that drive it.
Markus Thielen, the founder of 10x Research, articulated in an interview with Cointelegraph that the FTX payout is a “key focus” due to the “proposed $5–$8 billion inflow,” which has the potential to incite bullish sentiment.
“There’s a possibility of a melt-up in risk assets, as the Fed [United States Federal Reserve] seems to have raised the level of the S&P 500 at which they would intervene to protect investors, signaling the potential for further rate cuts — often referred to as the ‘Fed put.’ As a result, many investors are likely to reposition their portfolios in anticipation of 2025.“
Seasonal themes The 10x Research report emphasizes that Bitcoin has historically demonstrated robust performance from October to March.
The report posits that this trend may recur this year, particularly in light of the previous 2014, 2017, and 2021 market cycles.
“While our contrarian bearish outlook since March/April was based on various factors, Bitcoin’s 2024 performance has once again followed its seasonal pattern — just as it did in 2023.“
Risks and Catalysts associated with BTC
The report examines a variety of external factors that have the potential to influence Bitcoin’s end-of-year performance. The expected bolstering of the optimistic momentum is liquidity.
Macroeconomic conditions, including inflation concerns, US election-related dynamics, and the interest rate decisions of the US Federal Reserve, can influence the price of BTC.
Despite the alignment of potential bullish catalysts for BTC, the report advises investors to exercise caution, emphasizing the asset’s history of drawdowns of up to 70% in previous cycles:
“The two key levels to watch for Bitcoin are the previous cycle high of $68,330 and the 21-week moving average […] Managing trades around these levels is essential for effective risk management […] This may involve selling during volatile periods, even at less-than-ideal levels.”
BTC Rally Amid Gold Surge
Gold, a risk-off asset, has experienced a new all-time high of over 5% since September 9 due to interest rate decreases and geopolitical tensions.
Since then, crypto analysts have been exchanging predictions regarding the potential impact of BTC’s price on the outcome of this substantial increase in gold prices.
On September 18, the Federal Reserve implemented a 0.5% interest rate reduction, which resulted in the risk-off commodity reaching a new record high price of $2,629 per ounce as of September 23.