Bitcoin’s price tumbled in the hours after hitting an all-time high just above $69,000 on Tuesday — though industry watchers have differing views on where it goes from here.
While the asset’s price significantly fell in the months after hitting a nearly identical level in November 2021, some believe this time is different.
The price of bitcoin (BTC) ascended above $69,000 at about 10 am ET. It stood at about $61,300 at 3 pm ET — down about 11% from the day’s apex.
Read more: Bitcoin price surges past $69k to hit new all-time high
But Matteo Greco, a research analyst at Fineqia, said there are no “major resistances” blocking BTC’s price from going higher.
He noted strong momentum for the spot bitcoin ETFs that launched in January in terms of both trading volumes and net inflows. The 10 US bitcoin funds have seen net inflows of roughly $8 billion since hitting the market on Jan. 11, and the category notched its highest weekly volumes last week.
“This new [all-time high] is important because, unlike the previous cycle, it is not likely driven by speculative retail mania,” Chainlink co-founder Sergey Nazarov told Blockworks. “Rather, it is likely the direct result of massive and steady inflows from institutional investors.”
Aside from the ETF demand surge, the bitcoin halving — when per-block rewards to bitcoin miners will drop from 6.25 BTC to 3.125 BTC — is slated to occur next month. Such an event has historically led to “months of uptrend,” Greco said, as the slowing down of new issuance can create a so-called supply shock amid high demand.
Read more: The next bitcoin halving is coming. Here’s what you need to know
On a macro level, expected rate cuts from the Federal Reserve this year could prove to be a boon for risk-on assets, he added.
“From several points of view 2024 looks bullish at the moment, even though it is always difficult to time potential new highs and what the magnitude of it could be,” Greco told Blockworks.
Matthew Sigel, head of digital assets research at investment firm VanEck, noted that this is the first time bitcoin has reached a new high this close to a halving — making it “uncharted territory.”
“When bitcoin makes a fresh multi-year high, it tends to double in short order — an average of 105 days the last three times in 2020, 2017 and 2013,” he told Blockworks.
Sigel said his “medium-term” price target for bitcoin now sits at $350,000, though he did not disclose a specific timeframe for the target level.
Could a correction be coming?
A bitcoin price decline from here is also very possible, others said.
LMAX Group market strategist Joel Kruger said he is concerned about short-term risks associated with more hawkish Federal Reserve communications.
Any rise to $70,000 could be followed by “a well-overdue correction” before a subsequent push toward $100,000.
“Ultimately however, any bitcoin setbacks we do see in the days and weeks ahead, should be very well supported into the $50,000 area,” he said. “The medium and longer-term outlook for bitcoin and broader crypto assets is highly constructive.”
John Glover, chief investment officer of crypto firm Ledn, said he expects a significant bitcoin price retraction in the near-term.
A year after peaking at $69,000 in November 2021, bitcoin’s price had dropped below $20,000 in June 2022 after crypto lender Celsius froze withdrawals and transfers prior to filing for bankruptcy. BTC’s price dropped even lower, to about $16,000, in the aftermath of FTX’s collapse later that year.
“While many people will point to the fact that the sell-off that ensued post November 2021 — and previously after April 2021 — was due to bad players in the market, I would argue that…the sell-off was due to people being over-leveraged with unrealistic expectations for a straight-line appreciation to $100,000 plus,” Glover said in an email.
The Ledn executive noted he believes the crypto market is in a similar situation and could see a correction back to the mid-to-low $40,000 level in the coming weeks.
“Things always look bullish at the peak,” Glover said. “This extension feels like a blow-off top to me.”
Casey Wagner contributed reporting.
