Where will Bitcoin's new growth momentum end?

Market picture

The crypto market continues its impressive growth, rising over 3.5% in 24 hours to $1.87 trillion. Having broken through its January peak, the market is now at its highest level since April 2022. Confidently gaining momentum even before bitcoin halved, and with the Fed's rate cut date still some way off, the crypto is confounding not only the pessimists but also the expectations of the cautious. This is a fertile environment for FOMO.

Bitcoin has breached the $50.2K mark, surpassing the psychologically important round level and the January highs set at the time of the spot ETF launch. Looking to the medium term, be prepared for a move out of the $46-52K range to mark the start of an aggressive rally.

From a longer-term perspective, we are formally seeing the beginning of the Fibonacci pattern, the target of which looks to be the $63.7K area. This is close to historical highs and is unlikely to be the end of the global rally, although a significant shakeout is expected.

News background

According to CoinShares, investment in crypto funds rose by a significant $1.116 billion last week, following inflows of $0.708B the week before. Bitcoin investments increased by $1.089B, Ethereum by $17 million, Cardano by $6M and Solana by just $0.1M.

Crypto funds have seen total inflows of $2.7B YTD, with total assets under management of $59B - the highest since the start of 2022.

The potential cash flow into Bitcoin could reach at least $52B a year, according to investment firm Mechanism Capital. At the same time, BlackRock and Fidelity estimate the potential inflow to be $150B-200B over the next three years.

Investment firm Valkуrie Funds expects the number of active spot bitcoin ETFs to be reduced to seven or eight by the end of the year due to the high cost of managing shares and low profits due to competition.

Several on-chain indicators have entered the so-called "risk zone", which could signal the beginning of a bull market, Glassnode said. More robust net inflows into spot bitcoin ETFs have supported the market's rally.

Fundamental changes in the supply-demand balance, along with other factors, are likely to have a positive impact on bitcoin prices post-halving, according to Grayscale.

According to a survey by JPMorgan Bank, fewer and fewer large companies believe in the potential of blockchain, with the number falling to 7% by 2024.

By the FxPro Analyst Team