Bitcoin’s price is poised to soar beyond $40,000 before the year-end, as suggested by Matrixport analyst Markus Thielen in the wake of Binance’s settlement with the Department of Justice (DOJ) and the guilty plea of its former CEO Changpeng Zhao to financial violations.
Matrixport’s latest research report, despite the negative impact of the Binance news, paints a resilient picture for Bitcoin. The cryptocurrency weathered a temporary correction, rebounding to its nearest support at $36,000. Thielen’s analysis indicates a robust counter-trend reaction, with an 80% probability of Bitcoin surpassing $38,000 by the end of this month, followed by a 90% probability of a rally above $40,000 in December. The overall outlook remains bullish.
Highlighting a noteworthy trend, the report reveals that since September 2023, Tether’s USDT market capitalization has surged by $5 billion. This uptick suggests a growing inclination among institutional investors to shift fiat (dollars) into stablecoins, potentially facilitating conversions into other cryptocurrencies, particularly Bitcoin.
The research also sheds light on the escalating fees across various blockchains, with Bitcoin experiencing the most significant rise in monthly fees this month. This fee surge aligns with Bitcoin’s impressive price surge of +28% in October 2023, attributed to the increasing likelihood of a Bitcoin spot ETF being listed in the U.S.
November Bitcoin Market Dynamics
While November appears to be a month of consolidation with average returns of +6%, the market is currently outpacing expectations at +8.5%. This unexpected surge indicates a reemergence of seasonality influencing the market dynamics.
Bitcoin’s dominance peaked at 53.4% on October 26, but with BlackRock filing for an Ethereum ETF, traders are diversifying risk capital towards Ethereum as a higher beta-trade. Notably, fees within the Ethereum ecosystem in November have reached their highest level since July 2023. Ethereum’s short-term re-entry level is projected at $2,030, with the shorter-term model signaling a long position on September 27 at $1,600 and the longer-term model suggesting a long position on October 25 at $1,787.
The macro-environment continues to favor cryptocurrencies, with a confident anticipation of bond yields falling to 2.60% in 2024 or 2025. The U.S. 10-year Treasury yield seems to have peaked at 4.95% for this cycle, currently testing last year’s high at 4.20/4.23%. This re-pricing of bond yields is expected to trigger a new boom for the stock market, particularly benefiting second-tier technology stocks that typically correlate with second-tier cryptocurrencies, known as altcoins.
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