Bitcoin Faces Macro Headwinds; Ledn CIO Sees BTC at $92K by 2024-end

Bitcoin, the leading cryptocurrency, has experienced a notable pullback from its all-time highs, dragging other major cryptocurrencies down with it, as investors fail to witness the anticipated “halving bump” in the market. The recent retreat comes amidst a landscape of mixed economic indicators and wavering optimism regarding the approval of Ethereum spot Exchange-Traded Funds (ETFs) in the United States.

The surge in investor interest in cryptocurrencies, which had been buoyed by the introduction of the first spot bitcoin ETFs in January, has waned in recent weeks. Despite initial excitement surrounding the imminent launch of Ethereum spot ETFs, confidence has dwindled, contributing to the somber sentiment pervading the crypto market.

Adding to investor unease is the specter of a potential economic downturn in the United States, characterized by persistent inflationary pressures and a marked slowdown in GDP growth during the first quarter. These macroeconomic concerns have cast a shadow over the outlook for cryptocurrencies, which have often been viewed as alternative assets in times of economic uncertainty.

April witnessed a volatile crypto market with a significant pullback in Bitcoin from the new ATH in March

Bitcoin’s price performance over the past month underscores the market’s volatility, with a general downward trajectory punctuated by sporadic signs of recovery. In April, bitcoin prices dipped over 8%, closing the month at $60,318, a significant retreat from the record highs of nearly $74,000 witnessed in March. Similarly, Ethereum prices, which had surged to $4,092 in March, concluded April just shy of $3,000, reflecting investors’ lingering hopes for the approval of Ethereum spot ETFs.

Despite the recent downturn, both bitcoin and Ethereum have posted substantial gains year-to-date, up approximately 50% and 40%, respectively. However, the performance of cryptocurrency investment vehicles, such as the Grayscale Bitcoin Trust ETF (GBTC), has been less robust, with GBTC experiencing an 11% decline in April, driven primarily by concerns over its operational costs rather than fundamental issues within the cryptocurrency market.

Bitcoin Halving is Over Now

The completion of the latest bitcoin halving event on April 19 further underscored the evolving dynamics within the crypto space. With each halving event, the supply of new bitcoins is reduced, historically triggering price rallies. However, the recent halving, marking the fourth since bitcoin’s inception, saw rewards for miners halved from 6.25 BTC to 3.125 BTC, highlighting the ongoing maturation of the bitcoin ecosystem.

Concurrently, the launch of Bitcoin Runes, a protocol enabling the creation and trading of meme coins on the bitcoin blockchain, coincided with the halving event. Developed by Casey Rodarmor, Bitcoin Runes offers a novel approach to cryptocurrency trading, albeit with initial challenges related to liquidity and price volatility.

US SEC Expected to Deny Ethereum spot ETFs

Amidst the backdrop of regulatory uncertainty, the spotlight now falls on the pending decisions regarding Ethereum spot ETFs by the U.S. Securities and Exchange Commission (SEC). Despite optimism following the approval of Ethereum futures ETFs in 2023, recent indications suggest that the SEC may adopt a cautious stance, potentially delaying the green light for spot Ethereum ETFs.

As key deadlines for ETF applications approach in May, including those from VanEck and ARK Investment Management, investors are bracing for potential setbacks amid reports of discouraging interactions with the SEC. The regulatory agency’s inclination to observe the performance of existing cryptocurrency investment products before approving spot Ethereum ETFs underscores the evolving regulatory landscape shaping the future of digital asset investment.

The cryptocurrency market faces a confluence of challenges, from regulatory hurdles to macroeconomic uncertainties, dampening investor sentiment and fueling volatility. As stakeholders await clarity on the regulatory front, the trajectory of cryptocurrencies in the coming months remains uncertain, underscored by the need for regulatory clarity and market stability.

Expert Analyses and Future Projections

As global financial markets grapple with tightening liquidity, predictions about Bitcoin’s future are growing increasingly polarized. John Glover, Chief Investment Officer at Ledn, remains bullish on the cryptocurrency’s prospects, forecasting a rise to $92,000 by November 2024, following what he refers to as “Wave 5” of Bitcoin’s price movements.

Once the 4th wave is completed I expect that the Wave 5 push to circa $92k will ensue
Once the 4th wave is completed I expect that the Wave 5 push to circa $92k will ensue. Source: John Glover Analysis.

Glover’s optimism stands in contrast to the broader economic indicators that suggest a challenging environment for cryptocurrencies in the short term. “The BTC price action continues to track my expected path for Wave 4,” Glover stated, referencing the recent dip to $56.5K, which he believes may mark the completion of the correction phase. “Although we might still see prices in the range of $52-55K before Wave 4 concludes by June 2024, I am confident of a strong push to around $92K subsequently,” Glover added.

Meanwhile, Ryan Lee, Chief Analyst at Bitget Research, provided a more cautious outlook. According to Lee, the tightening of global financial liquidity, influenced by a surprising uptick in the US Consumer Price Index and a disappointing GDP report for Q1, may suppress cryptocurrency prices in the near term.

“In May, we anticipate Bitcoin to fluctuate between $56,000 and $68,000, while Ethereum could see wider swings from $2,600 to $3,600 due to its upcoming ETF,” Lee explained.

Bitcoin’s price has seen a slight increase of 0.04% over the last 24 hours. At the time of writing Bitcoin was trading at approximately $63,950.61, according to CoinMarketCap.

The contrasting forecasts highlight the uncertain landscape that Bitcoin and other cryptocurrencies face amidst macroeconomic pressures. While Glover’s long-term forecast suggests a significant rebound, Lee’s analysis underscores the potential volatility and downward pressure in the coming months, reflecting broader concerns over US interest rates, real estate demand, and weakening consumer spending.

Moreover, with the US dollar index maintaining strength around 106 and the Federal Reserve’s net liquidity tightening, the financial conditions suggest a cautious approach for investors. The cryptocurrency market, known for its volatility, could see significant fluctuations as it navigates the challenging macroeconomic environment.

Read Also: Bitcoin ETFs Mark The Start Of Bitcoin’s Second Epoch

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