BIT Blog

Analysts' Insights

Analysts' Insights

Matrixport on BIT - Pulse Check: Why Bitcoin Surging above $40,000 is Inevitable

- by Markus Thielen

Despite the negative Binance news, initially perceived as a risk-off event, Bitcoin has only experienced a temporary correction, bouncing back to its nearest support at $36,000. A robust counter-trend reaction has since emerged, and we anticipate a high likelihood of Bitcoin surpassing $38,000 by the end of this month with an 80% probability, followed by a rally above $40,000 in December with a 90% probability. Our outlook remains bullish.

Since September 2023, Tether’s USDT market capitalisation has increased by $5bn, signaling a growing trend among institutional investors to shift fiat (dollars) into stablecoins, potentially converting them into other cryptocurrencies, such as Bitcoin. Notably, there has been a noticeable increase in fees across various blockchains, with Bitcoin exhibiting the most significant rise in monthly fees this month. Bitcoin prices surged by +28% in October 2023 as the probability of a Bitcoin spot ETF being listed in the U.S. increased. Though November appears to be a month of consolidation with average returns of +6%, it is clocking in at +8.5%. This indicates that seasonality appears to be influencing the market again.

Bitcoin's dominance reached its peak at 53.4% on October 26. With BlackRock filing for an Ethereum ETF, traders have increasingly allocated risk capital towards Ethereum as a higher beta-trade. Notably, fees within the Ethereum ecosystem in November have reached the highest level since July 2023. Ethereum's short-term re-enter level is $2,030. The shorter-term model went long on September 27 at $1,600. Our longer-term model suggested a long position on October 25 at $1,787. 
The macro-environment continues to support crypto. We confidently anticipate bond yields to fall to 2.60% in 2024 (or 2025) as the US 10-year Treasury yield appeared to have peaked at 4.95% for this cycle and is (nearly) testing last year’s high at 4.20/4.23%. This re-pricing of bond yields is poised to trigger a new boom for the stock market, particularly benefiting second-tier technology stocks, which typically correlate with second-tier (altcoins) cryptocurrencies

Written by Markus Thielen, Head of Research & Strategy at Matrixport. Author of Crypto Titans.

Join now for more insights around crypto!

Industry views and information shared do not represent Matrixport's position and do not constitute any investment advice.

Sign Up Now