Bitcoin Surges Amid Institutional Demand

Katalin Tischhauser, leading investment research at Sygnum, forecasts Bitcoin‘s potential journey to over $100,000, while advocating prudence among industry participants. She argues that without unpredictable “black swan” events, a market dip akin to 2022 is improbable, though various factors still shape the crypto market’s behavior.

What Does Technical Analysis Indicate?

A careful assessment of technical indicators is crucial due to the crypto market’s volatility. The double top formation, recently observed in technical analysis, suggests Bitcoin’s gains might stall. Over the past 50 days, Bitcoin has oscillated between $100,000 and $110,000, reflecting waning bullish momentum.

Experts caution that if Bitcoin retraces from $110,000 to under $75,000, it might drop to $27,000—amounting to a 75% decline from its peak. Such drastic shifts, however, usually aren’t driven by technical factors alone.

“The market’s reliance on sentiment complicates fundamental analysis,” Tischhauser explains. “But absent an unexpected event like Terra or FTX, a severe crash is unlikely. With current political and regulatory tailwinds, an ongoing uptrend seems plausible.”

How is Institutional Involvement Impacting the Market?

A surge in institutional interest, rather than speculative narratives, is currently buoying Bitcoin’s momentum. From January 2024, Bitcoin funds have seen more than $48 billion in net inflows on the Nasdaq.

Bitcoin’s role as a corporate value repository is growing, with 141 public companies collectively owning 841,693 Bitcoins, maintaining consistent demand and prices.

“After thorough assessments, institutions incorporate Bitcoin into portfolios for the long haul,” Tischhauser mentions. “This burgeoning institutional demand will bolster price support for an extended period.”

Will the Usual Halving Cycle Affect Bitcoin?

Traditionally, Bitcoin prices surge after the halving cycle every four years, subsequently peaking and falling. The 2024 halving, however, may deviate from this pattern. Institutional dynamics now exert a greater influence, with miner sales contributing minimally to transaction volumes.

“With shifting market leadership, halving may not have its typical impact. Now, miner sales pressure is a minor part of daily trading volume, making supply reduction less impactful than before,” Tischhauser states.

Experts warn that past notable downturns were propelled by political events and market shocks. Current resilience is due to liquidity and institutional interest. While careful technical analysis remains crucial, significant price crashes appear unlikely unless unforeseeable major events occur.

The prevailing Bitcoin price reflects institutional demand, diminishing the impact of the latest halving cycle. New dynamics are now dominant, as investors are urged to incorporate broader market developments alongside technical data for an informed outlook.