The scenario written by pessimists in the crypto market is valid. Bitcoin price has been trending sideways since March. Altcoin prices decreased in the same date range. Bitcoin can remain in the 25k-31k range for a while. As the price approaches the bottom of the band, buying increases. When the upper band is approached, sales occur.
The 2020-2021 bull market gained momentum in December 2020, with the 30k-31k band passed. In May 2022, the 30k-31k band in Bitcoin was broken downwards, indicating that the bear market had begun. The goal now is to pass this region. If this zone can be passed, we can say that the bull market has started.
It is also possible to interpret the Bitcoin chart in a triangle formation. As time goes by, price movements become moderate. This formation shows that Bitcoin will move in a narrow band until December.
Altcoins
There have been intense sales in the altcoin market since May. Bitcoin is absorbing altcoin liquidity. Thus, while Bitcoin continues its horizontal course, altcoin prices are falling rapidly. Altcoin market value has started to move in a narrower range recently.
The chart shows that while the tops are falling, the bottoms are also rising. Will this formation break downwards or upwards? I see a higher probability of a breakout to the upside.
TL;DR
The 2017 and 2021 bull market flares were fired in December of the previous year. The 2024 bull market may also start in December 2023 because the current formations for Bitcoin and altcoins will likely be valid until December. In addition, prices began to fall in November 2021, and sales accelerated in December. The bear market will have completed two years in November.
For a new bull market to begin, the FED must have reached the end of its interest rate hike cycle. Inflation falling below three percent would have a positive impact on the market. Thus, interest rate reduction may now become the top agenda in the market. The FED does not seem intent on reducing interest rates in 2024, but a symbolic interest rate cut may become necessary for a soft landing. Even verbal guidance that monetary conditions will ease can trigger the expected strong momentum in the crypto market.
Consumer inflation will be announced today in the USA. Better-than-expected data will relieve the crypto market because there is intense selling pressure on prices.
According to futures pricing, the probability of the FED increasing interest rates in November has decreased to 8%. Rising bond interest rates were effective in this decline. Because high bond prices mean tightening, some FED members think this eliminates the need for additional tightening. The probability of an interest rate increase at the December meeting is 26%.
The Truflation site calculates consumer inflation daily and puts the annual inflation in the USA at 2.37%. If this measurement is reflected, even partially, in official data, it may lead to a more optimistic atmosphere in the market.
Thank you for reading.