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A.I., Crypto & Tech Stocks
Bitcoin’s Historic Surge: Will the Rally Hold or Waver?
Bitcoin's price has reached a groundbreaking milestone, crossing the $99,000 threshold for the first time (yet to cross $100k at the time of this writing).
This historic surge follows reports that President-elect Donald Trump’s team is considering creating a White House position dedicated to cryptocurrency policy.
The Trump Effect: Could Bitcoin Hit $100K Soon?
The crypto market has coined this enthusiasm the “Trump Trade,” with speculation that a pro-crypto administration could bring regulatory clarity and further institutional adoption. This optimism has fueled predictions of Bitcoin reaching the long-anticipated $100,000 mark by the end of 2024.
According to Polymarket, 92% of bets favor Bitcoin hitting six figures within this timeframe.
Beyond $100K: Lofty Projections for 2025
Some analysts are looking even further ahead. Bernstein Research, in its October report, forecasted that Bitcoin could climb to $200,000 by the end of 2025. This bullish outlook is grounded in factors such as increased institutional demand, favorable regulatory developments, and the potential establishment of a national Bitcoin reserve.
For example, Senator Cynthia Lummis has proposed legislation to acquire up to 5% of Bitcoin’s total supply over the next five years, an initiative that could lead to investments exceeding $100 billion. Additionally, Bitcoin ETFs and major corporate acquisitions, such as MicroStrategy's ambitious $42 billion Bitcoin strategy, are expected to drive demand.
Historical Patterns Suggest a $150K Peak
Bitcoin’s previous bull cycles have been shaped by its halving events, where mining rewards are reduced, often triggering exponential price growth.
Analysts using the Logarithmic Regression Model suggest that Bitcoin could peak at $150,000 in 2025. Historical data shows rallies of 8,000% following the 2012 halving, 2,900% after 2016, and 560% post-2020. If Bitcoin follows this pattern, a 300–400% rally after the April 2024 halving aligns perfectly with the model’s upper band prediction.
Caution Ahead: The Bearish Fractal from 2021
However, Bitcoin’s meteoric rise could face turbulence. Similarities to its 2021 price action, where bearish divergences signaled a peak before a dramatic 77% correction, have raised concerns.
Bitcoin's current rally near $99,000 is accompanied by a weakening RSI, suggesting that momentum might be slowing. If history repeats, the bull cycle could top out at $100,000 before a significant correction, potentially targeting $60,000 as a lower support level.
The Cycle of Boom and Correction
Bitcoin's market dynamics often follow a familiar script: optimism and bullish catalysts drive prices higher, luring investors and leveraging debt. But when macroeconomic conditions shift, corrections can be swift and severe, as seen in past cycles and scandals like FTX’s implosion.
As we enter a potentially pro-crypto Trump administration, the question remains whether Bitcoin’s rally will sustain its momentum or succumb to the cyclical nature of the market. The next few years promise a dramatic continuation of what has been dubbed the “greatest crypto show.”
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Nothing in this newsletter is financial advice. Always do your own research and think for yourself.