Matrixport revealed in its latest report that January 2024 is likely to see Bitcoin BTC/USD push to $50,000 amid various supporting factors.
What Happened: A Matrixport report highlighted that during Asian trading hours, the Bitcoin funding rate peaked at a new all-time high of 66.1%, implying longs pay shorts 66% per year to stay long.
This futures-driven spot market squeeze could lift Bitcoin prices above Matrixport’s $50,000 target level for January 2024.
Price Action: The price of Bitcoin gained 6.1% over the last 24 hours, expanding its seven-day surge to 7.4%. In early trading hours, Bitcoin peaked at a 52-week high. Trading volumes in the past 24 hours surged by 154.4%.
With Bitcoin surging to $45,000 first time in 20 months, holding long positions or leveraged bullish bets in the perpetual futures market has become the most expensive since the peak of the bull market in 2021.
See Also: Bitcoin Surges Above $45,000; Sei, Astar Among Top Gainers
Rumors of a potential spot Bitcoin ETF approval on Jan. 2 or Jan. 3, one week ahead of its original target dates between Jan. 8 to Jan. 10, are driving traders to bet on higher prices.
However, significantly elevated funding rates could lead to a dicey situation for long positions if the current uptrend were to stop. A price pullback could lead to liquidations of long positions.
Why It Matters: The Matrixport report highlighted that during halving cycles Bitcoin mining companies contain their supply levels leading to supply shortage and thus a surge in prices.
The halving event in April 2024 will coincide with a U.S. presidential election year, which has traditionally been good years for the price of Bitcoin. The average Bitcoin return in 2012, 2016 and 2020 was +192%, the report stated.
Based on the same calculation, Bitcoin is likely to reach the $125,000 target set by Matrixport in July 2023.
Crypto analysts see Bitcoin potentially a hitting six-figure valuation in 2024.
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