4 Reasons to Be Bullish on Bitcoin in 2024 (Opinion)

2024 has been quite an eventful year so far for Bitcoin (BTC), whose price is currently hovering around $58,500, or up 40% year-to-date (YTD).

The most successful period for the main cryptocurrency was in mid-March when it hit a new all-time high of over $73,500. In the following lines, we will explore some important factors that suggest that a new peak could be observed before the end of the year.

Fed actions

The US central bank, the Federal Reserve, adopted an aggressive anti-inflationary regime in the wake of COVID-19 with a series of 11 consecutive interest rate hikes starting in early 2022 to set the benchmark in the current 5.25-5.50%.

A possible Fed pivot depends on economic data and the inflation rate. Previously, it was taught that the institution would wait until inflation cools to the healthy area of ​​2% before lowering interest rates. Not long ago, however, Chairman Powell said the bank could pivot sooner than expected:

“The implication of that is that if you wait until inflation gets down to 2%, you’ve probably waited too long because the tightening that you’re doing, or the level of tightness that you have, is still having an effect. That’s probably going to drive the inflation below 2%.

A potential rate cut in the US would be in line with similar actions by other central banks around the world. Several weeks ago, the Bank of England (BoE) cut rates to 5%, marking the first cut since March 2020. The European Central Bank and the Bank of Canada also pivoted earlier this year.

The next FOMC meeting is scheduled for September 18th and it will be interesting to see if the Fed goes ahead with this move. The eventual downgrade of the benchmark will make it cheaper to borrow money, potentially increasing interest in risky assets such as BTC.

The US presidential election

Another element that could drive a price rally for the top digital asset is the outcome of the US presidential election. The vote is scheduled for November with Democratic candidate Kamala Harris and Republican Donald Trump being the main contenders.

According to some industry participants, Trump’s potential triumph could be interpreted as good news for BTC bulls, given their recent pro-crypto stance.

It was recently presented as the right choice for supporters of the cryptocurrency industry, promising to let the sector thrive. He also pledged to increase US BTC mining efforts and opposed the idea of ​​launching a central bank digital currency (CBDC).

During the Bitcoin conference in Nashville, held at the end of July, Trump expressed his desire for the United States to become the world leader in cryptocurrency and establish a national strategic reserve of BTC.

Over the weekend, Trump and Harris were estimated to have the same chance of winning in November. Currently, the Democratic candidate appears to have the upper hand, with 51% to her main opponent’s 47%.

The Halving

Also worth noting is the Bitcoin halving, which took place on April 20th. The event occurs approximately every four years and halves the daily issuance of the main cryptocurrency.

Historically, it has been a precursor to a major rally for BTC and the entire market. Some experts recently recalled that it usually takes a year (or even longer) for the asset to reach its peak after the event. X user Ali Martinez noted that Bitcoin peaked around 530 days after halving in the last two cycles. “If history repeats itself, we are still in the early stages of this cycle,” he argued.

Rekt Capital predicted a bull run at the end of September, stating that BTC “tends to enter the parabolic phase of the cycle about 160 days after the halving.”

Territory of fear

Last but not least, we’ll focus on the Fear and Greed Index, which measures current investor sentiment based on several factors. It ranges from 0 to 100, with a ratio above 50 suggesting a state of “greedyness.”

For the past week, the metric has been in “fear” or “extreme fear” territory, which some investors and traders could see as a buying opportunity. After all, one of Warren Buffett’s investment tips is to be greedy when others are fearful and vice versa.

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