Bitcoin has been locked in a rangebound rally since the summer. A market watcher cites the key factors that are driving Bitcoin higher. There is uncertainty over the impact of the US election on the price of Bitcoin.
Bitcoin has struggled to stay above $65,000 since the summer.
Its price has been locked in a volatile sideways movement since hitting $74,000 in March.
However, one market watcher expects Bitcoin to break out of this predicament and touch the $80,000 level before the end of the year.
According to Matt Haugan, chief investment officer at crypto fund manager Bitwise, if three conditions are met.
Here are the stars that need to align for Bitcoin.
Democrats won't sweep
Crypto's current lull is due to uncertainty over the upcoming US election in November.
Republican presidential nominee Donald Trump has openly courted the crypto industry this election cycle, despite his negative attitude toward the market during his first term.
Democratic Vice President Kamala Harris, by comparison, has been slow to embrace the industry and instead offered vague hints on how to maintain competitiveness in both US crypto and artificial intelligence.
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Meanwhile, crypto elites criticized the Biden administration for unfairly targeting US companies.
“Bitcoin doesn't need politicians to thrive,” Haugan wrote that In a blog on Wednesday. “They need it to get out of the way.”
Haugan added that any outcome other than a clean sweep for Democrats in both houses of Congress and the presidency would be a positive outcome for Bitcoin.
Meanwhile, Bernstein Research analysts say Bitcoin will do well regardless of the election results.
However, analysts predict that Bitcoin will be locked into the current sideways price movement unless the market perceives good odds for a Trump win.
According to the analysis, Bitcoin reached $90,000 after Trump's victory, but a short-term drop to $40,000 is possible if Harris wins.
Easing of fiscal policies
Bitcoin will also rise amid the changing global economic environment. Both the US and China have recently implemented more liberal monetary policies.
In September, the US Federal Reserve cut interest rates for the first time since the Covid pandemic.
Then, China followed with a massive $282 billion fiscal stimulus to stimulate growth.
Those moves sparked a short crypto rally that saw bitcoin break above $66,000 in late September, but was ultimately curtailed by renewed tensions in the Middle East.
Haugan writes that the market is “hungry for more” of these more liberal monetary policies.
There are no black swans
The third condition? There are no black swans before the end of the year, or unexpected events with potential for huge consequences.
As Haugan writes, “The history of crypto is unfortunately littered with countless surprises.”
Bitcoin's potential to reach $80,000 is marred by major shocks such as hacks or massive lawsuits.
And over the summer, Germany sold $2.3 billion worth of Bitcoin, a 25% price drop.
The US holds nearly $13 billion worth of seized bitcoin, and the decision to sell off the hoard this final quarter will send the market spiraling and scupper its chances of setting a new peak this year.
“If we can make it through the end of the year without shocks like these, I expect new all-time highs and beyond,” Haugan wrote.
Osato Awan-Nomayo Our Nigeria based DeFi representative. He covers DeFi and technology. To share tips or information about articles, please contact him here [email protected].
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