Bitcoin Price Annual Forecast: BTC readies for home run in 2024 with two bullish fundamentals on tap

• Bitcoin price could reclaim the 2021 highs of around $69,000 in 2024 amid anticipation of the next bull cycle.
• 2023’s Q4 set the tone for BTC, with clear bullish themes, ETF approvals, and the halving event waiting to drive the rally.
• Spot BTC ETF approvals could kick the year off to a good start, ultimately bringing billions of dollars of new investments to the space.

Bitcoin (BTC) price has been bullish in 2023, scaling up as it tried to plough back the ground lost following the Terra (UST) and FTX crashes of the preceding year. The trajectory took shape in spite of it being an eventful year, with BTC riding the wave of macroeconomic as well as industry-related developments.

Also Read: Can Bitcoin bears challenge crypto’s 2023 bull rally?

Bitcoin bull cycle set to consolidate in 2024 on expected ETF approval, halving event

On the macroeconomic front, the influence of fundamentals such as interest rates and inflation on Bitcoin steadily dried up. Other fundamentals driving Bitcoin price in 2023 included the conclusion of the yearlong FTX case and rival exchange Binance’s CEO, Changpeng Zhao (CZ), pleading guilty to money laundering.

While these events inspired volatility in the cryptocurrency market and acted as bearish catalysts, Bitcoin price’s tailwinds sprouted from three key events that have set the tone for the BTC market ahead of 2024. These are:

• The history of Bitcoin price recording the best returns in Q4, with October being the best-performing month.
• Bitcoin Exchange-Traded Funds (ETFs) narrative, which traders and investors continue to front run, with an expected approval date between January 5 and 10, according to experts.
• Bitcoin halving, slated for April 2024, an event expected to kick-start the next bull cycle.

2023’s fourth quarter set the tone for Bitcoin

As was expected, the fourth quarter registered the best returns for BTC in 2023, bringing the year’s run to over 160%. The rally climaxed in October, which was the month that marked the best returns for BTC. Reality met expectation, as Q4 has historically proven to be the best-performing quarter for Bitcoin.

Bitcoin quarterly returns between 2013 and 2023

It is worth mentioning that in previous years, there were no spot BTC ETFs providing tailwinds for Bitcoin. If history does repeat – and with the current optimism for an approval among experts like Eric Balchunas and James Seyffart about the SEC approving spot BTC ETFs between January 5 and 10 fueling investor appetite – 2024 could exceed expectations for investors.

Drying up influence of macroeconomics on Bitcoin price

Further, and across 2023, Bitcoin price has recorded a reduced reaction to macroeconomic data, comprising US inflation data (CPI) and the Federal Open Market Committee’s (FOMC) monetary policy. 

High interest rates negatively affect risk-on assets like Bitcoin, with an increase in the chances of a hike, heightening the pressure on BTC price thereby ushering further corrections. Nevertheless, in instances that this happened, or the reverse, in 2023, Bitcoin price failed to record strong reactions.

The latest FOMC saw Bitcoin price rise less than 5%, testing the $42,800 level, a move that only lasted for a short while before a correction. This came after the Fed Chair, Jerome Powell, hinted rate cuts were coming “in view.” Specifically, the markets moved as the outlook for interest rates fell from 5.1% to 4.6% in 2024. Lower interest rates are a boon for risk assets such as Bitcoin.

As Jerome Powell suggested cheaper money is finally coming, Bitcoin stands among the winning investments in 2023, continuing its streak as the most “binary” asset since 2016 – either performing the best or worst in each calendar year. This is the contrast of what happened in 2022.

Asset classes of 2023, Fed pivots in context

Notwithstanding, crypto assets continue to be a hedge against inflation, with the dollar generally being inversely correlated with Bitcoin price. This has helped drive greater adoption of cryptocurrencies in certain emerging markets with high inflation and rapid local currency depreciation.

Bitcoin price rides spot ETF narrative

Spot BTC ETF as a narrative has been pivotal in driving cryptocurrency markets, playing a big role in the volatility and massive surge in Bitcoin price in 2023. With 13 institutional players in the race for approval – among them, Grayscale and BlackRock – institutional interest in the crypto space has proven to be at its peak.

Updated version of spot BTC ETF race table

According to Eric Balchunas and James Seyffart, two ETF experts from Bloomberg Intelligence, there’s a 90% chance the SEC will approve the spot ETFs between January 5 and 10 of 2024. The degree of certainty comes after the US SEC has demonstrated ongoing engagements with the institutional players, evidenced by the series of amendments and delays.

As the pro-BTC community continued to hold out hope, these series of events only served to raise anxiety and more specifically, FOMO (fear of missing out) that continues to drive Bitcoin price to the end of the year.

Seyffart and Balchunas’ optimism for approvals bears the support of SEC commissioner Hester Pierce, alias crypto mom, who said she does not see why there is need to prevent spot ETF approvals.

The approval of spot Bitcoin ETFs could see billions of dollars of new investments come to the space as it would allow more investors to trade cryptocurrency. Specifically, it would provide investors with a convenient way to invest in Bitcoin through traditional brokerage accounts. 

Investors would be able to enjoy enhanced transparency and oversight which is currently absent in the cryptocurrency market. Moreover, the product would bring institutional-grade custody solutions, thereby reducing the risk of theft or loss of Bitcoin.

With more investors coming into the market through the ETF, market liquidity would increase, effectively increasing the overall trading volume of Bitcoin. With increased trading volume comes price stability and reduced volatility. Such an outcome would make Bitcoin a more attractive investment option for retail as well as institutional clients.

Bitcoin aside, the broader crypto market would enjoy greater acceptance and recognition of BTC by regulatory bodies, thereby fueling adoption as well as mainstream BTC integration.

For now, however, the SEC continues to engage with the institutional players, ironing out creases in their applications while encouraging for cash creates (cash redemptions) as opposed to in-kind creates (crypto redemptions).

The financial regulator’s bone of contention remains the potential for market manipulation, lack of investor protection, and the possibility of fraud in the Bitcoin market. These concerns have led the SEC to reject multiple Bitcoin ETF proposals in the past.

Nevertheless, Bitcoin ETF proponents observe that the market has matured significantly following the initial series of rejections.

Bitcoin halving could kick-start the next bull cycle

Besides spot BTC ETFs, the Bitcoin market also has the BTC halving to look forward to, slated for April 2024. Crypto analyst behind the X handle @rektcapital evaluated the Bitcoin price trend and predicted that BTC price could revisit the $45,000 level prior to the fourth halving event. The analyst notes the trend that repeated in the past three cycles and predicted a pullback to the $42,000 level after BTC touches $45,000. 

Bitcoin halving

According to analysts like Michaël van de Poppe, now is the best time to invest in altcoins, with venture capitalists (VCs) already itching to get the funding going.

Meanwhile, BTC miners remain disconcerted about this event even as investors count the days before their bags start to pump. The miners’ dread comes as the event will see a 50% slash in mining rewards, reducing from 6.25 BTC to 3.125 BTC per block. For investors, the halving is value-adding as it reduces the growth in newly mined BTC.

Miners’ operating expenses have increased in cost over time as well. Specifically, mining infrastructure has grown more complicated and expensive. Others complain about higher electricity rates, and talk of a 30% tax on US miners has caused even more consternation. This is because BTC hash power – the power requisite for computer or hardware operations in solving different hashing algorithms – is mostly concentrated in the US. 

2024 Bitcoin price outlook

Bitcoin price has been stuck within the weekly supply zone since the onset of December, an order block extending from $40,390 to $46,809. Interestingly, the midline of this order block (mean threshold), which is the level to beat for the confirmation of the uptrend, coincides with the most important Fibonacci level, 61.8%, at $43,821. A break and close above this level would confirm the continuation of the uptrend.

A decisive move above the $48,000 psychological level or below the $37,800 will help determine the next directional bias.

Increased buying pressure could see Bitcoin price extend north, with a move above the $48,000 level flipping the weekly supply zone into a bullish breaker and setting the pace for the continuation of the uptrend.

Such a move could see Bitcoin price extend to tag the 70.5% Fibonacci level at $49,604, or higher, tagging the $50,000 and ultimately the $60,000 psychological levels in a highly bullish case. In highly bullish cases, the gains could see BTC price stretch a neck higher to the local top at $69,000, with the potential to fill the market range and create a new range high above $69,211.

Technical indicators support the bullish outlook, with the Awesome Oscillators (AO) showing a strong presence of the bulls in the market, evidenced by the large volumes of green histogram bars in the positive territory. The Moving Average Convergence Divergence (MACD) accentuates this outlook, heading north after moving above the signal line during the first week of October. It shows the odds favoring the upside.

More interestingly, the Relative Strength Index (RSI) remains above the 50 level, which is a good sign, pointing to strong price strength.

BTC/USDT 1-week chart

Further, one analyst, @CryptoJelleNL, has observed that the weekly RSI has never reached levels this high without kicking off a raging bull market.

BTC weekly RSI

If the same repeats, Bitcoin price could nuke, recording another hard pump that could potentially set the tone for a 2024 bull market.

Bitcoin price cool-off is a possible entry for investors before 2024

The consolidation within the weekly supply zone may mark a possible cool-off as Bitcoin price ascends to its golden ratio multiplier near-term target, as indicated by the Crosby Ratio. This metric reveals Bitcoin’s near-term price at “over-extended levels,” causing the urge for a slowdown.

Bitcoin Crosby Ratio chart

The golden ratio multiplier indicator explores the adoption curve of BTC as well as market cycles, with a view to determining how the price may behave in medium to long-term time frames.

On-chain metrics

GIOM

IntoTheBlock’s “Global In/Out of the Money” (GIOM) model reveals there is only one supply barrier that could prevent the largest cryptocurrency by market capitalization from achieving its upside potential. Based on this on-chain metric, the major area of interest lies between $43,211 and $67,413, which is filled by a high number of sellers that had previously purchased BTC around this price level. Here, roughly 6.11 million addresses are holding nearly 2.24 million BTC.

The data also shows that Bitcoin price has more robust support below than the pressure it faces above. This means any efforts to push Bitcoin price lower would be countered by buying pressure from all these addresses.

BTC GIOM

Conversely, if sellers have their say, Bitcoin price could pull south, potentially losing the $40,000 psychological level. In a dire case, the slump could see BTC break and close below the $37,800 support floor, where the bullish thesis would be invalidated.

Santiment

The Market Value to Realized Value (MVRV) ratio, which assesses the average profit/loss of investors who purchase an asset in the past month, sits at 3.564%. This indicates that investors who purchased BTC in the past month are sitting on an average 3.564% profit. Those who purchased BTC in the past week are sitting at a 0.306% profit on average.

BTC MVRV

The Social Dominance metric on Santiment is at almost 20%, showing the percentage of mentions of BTC on crypto-related social media relative to a pool of over 50 other most talked about tokens. The optimism comes as the countdown to the expected spot BTC ETFs approvals continue. The Social Volume metric also accentuates this outlook with notable spikes.

However, the Daily Active Addresses do not show a spike, suggesting no new addresses are being created. This is possibly because investors prefer to hold BTC as opposed to trading the token.

Daily Active Addresses Social Dominance and Social Volume

Evidence of the preference to hold is seen in the dwindling exchange inflows as investors are not interested in selling at the moment. Relative to this, the amount of holders is on a steady climb.

The supply on exchanges as a percentage of total supply metric is subdued, which is a bullish sign showing no expectation of sell pressure even for the short term.

BTC holders, Exchange Inflows, Supply on Exchanges (as % of total supply)

Meanwhile, the whale transaction count for large holders has moved over $100,000, and the $1 million worth of BTC is also spiking, possibly as they continue to accumulate ahead of the anticipated bull market.

BTC whales

Key levels to watch

As Bitcoin price remains within the weekly supply zone, key levels to watch include the midline of the supply barrier at $ 43,821. A weekly candlestick close above this level would confirm the continuation of the trend.

The $48,000 psychological level is also a key level to watch, as a flip of this resistance to a support would render the supply zone a bullish breaker and therefore springboard to higher levels.

Logical targets beyond here would be the $50,000 and $60,000 psychological levels, before a possible new range high above $69,211.

To the downside, a weekly candlestick close below the $37,800 level would be concerning, followed by the $35,000 and ultimately the $30,000 psychological level.

Summary

The right time to buy Bitcoin price would be before 2024 as the market could go parabolic amid FOMO – fear of missing out – with several bullish catalysts lined up in that year.

Focus should also turn to altcoins, which could benefit from capital or profit overflows from the Bitcoin market. Among the altcoins that could rally alongside Bitcoin include Ethereum (ETH), Dogecoin (DOGE), Avalanche (AVAX), Chainlink (LINK), and Litecoin (LTC), among others, which are seen to have strong correlations with Bitcoin currently.

BTC correlations

 Also Read: Bitcoin correlation cheat sheet for portfolio diversification

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