Grayscale Research suggests that the downside risk to crypto prices may be more limited than in the past, making an all-time high (ATH) for Bitcoin (BTC) this year a possibility.
Cryptocurrency markets are showing signs of recovery, with global market capitalization up by 5%, indicating a growing bullish sentiment.
Bitcoin 2024 ATH A Possibility
Grayscale attributes the recent market crash to July’s weaker-than-expected US employment data but believes Bitcoin could retest its ATH. This, however, depends on the US economy avoiding a recession and staying on course for a “soft landing.”
Grayscale Research expects token valuations to rebound, citing reasons for limited downside price risk. Among them is steady net demand from spot Bitcoin and Ethereum ETFs (exchange-traded funds). Other cited reasons include lack of credit provided by centralized financial institutions during the cycle and subdued altcoin returns. The research also cited potential shifts in the US political outlook around the crypto industry.
“If the US economy avoids recession and remains on a path to a soft landing, Grayscale Research expects token valuations to rebound and Bitcoin to retest its all-time high price later this year. However, even in a weaker economic environment, Grayscale Research has reason to believe that the downside risk to prices may be more limited than in past drawdowns,” the research stated.
Read more: How To Buy Bitcoin (BTC) and Everything You Need To Know
As the crypto market continues to show calm and restore optimism, the research highlights factors that will continue to influence market stability. It lists macroeconomic data, corporate earnings, and policy responses from central banks, especially the Federal Reserve.
The researcher’s outlook suggests that Bitcoin potentially reaching an ATH in 2024 is influenced by a combination of market changes, macroeconomic factors, and investor sentiment. It adds credence to recent predictions by Raoul Pal, former hedge fund manager at Goldman Sachs.
Pal said Bitcoin could rally to an ATH, citing macroeconomic conditions, US elections, and a weak US dollar. Pal said Bitcoin could rally to an ATH, citing macroeconomic conditions, US elections, and a weak US dollar. Henrik Zerberg is another bullish analyst who anticipates a blow-off top for Bitcoin and US stocks.
Indeed, the market sentiment is increasingly tilting in favor of Bitcoin’s upside. On Thursday, Bitcoin ETFs saw inflows of $194.6 million, indicating that Monday’s Bitcoin crash may have been a temporary setback rather than the start of a new bearish trend. These inflows also suggest a renewed appetite for Bitcoin and broader crypto exposure.
“Due to global macroeconomic factors, the crypto market is experiencing turbulent times. However, institutional fund inflows can help stabilize the industry. As uncertainty grows, investors tend to play it safe to prevent major losses, but institutional investors with a long-term strategy like MicroStrategy can help stabilize the capital drain,” Jamie Elkaleh, Country Manager at Bitget, told BeInCrypto.
The Bitcoin daily chart indicates that BTC is positioned to continue its climb, though low conviction among bulls, as reflected by the Relative Strength Index (RSI) remaining below 50, poses a challenge. However, strong support around $59,866 could help Bitcoin extend its gains. A daily candlestick close above the midpoint of the supply zone at $67,000 would set the stage for a retest of the ATH.
Read more: Bitcoin Price Prediction 2024 / 2025 / 2030
Conversely, if the RSI extends the nosedive and the $59,866 support level breaks, Bitcoin could provide another buying opportunity lower. A break and close below $55,313 would send Bitcoin to sweep the sell-side liquidity.
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