Macro crypto currency market outlook

Bitcoin has been trading in an uptrend since bottoming out in 2022. The market is now in the process of consolidating the latest round of gains ahead of the next major upside extension. While there is scope for a deeper correction in 2024, any setbacks should ultimately be very well supported into the $30k area ahead of the next big run through $50k and towards a retest and break of the record high. Only a monthly close below $30k would compromise the outlook.

If we look at January performance using a measure of where we started relative to where we closed, there really wouldn’t be much to talk about. Bitcoin closed out January less than 1% higher than where it opened the year. And yet, there is a lot more to tell when talking about the January story.

January will go down as an important month to remember when looking at the history of bitcoin and crypto assets. This was the month the SEC finally went ahead and approved the bitcoin spot ETFs. This was the month that set the stage for widespread adoption across mainstream retail and institutional investors.

Naturally, there was quite a bit of demand in the leadup to the event, which opened the door for a rally in the price of bitcoin to fresh multi-month highs just shy of $50k. This took the price to its highest level since December 2021, the same year of bitcoin’s record high.

The build-up and anticipation into the event, which occurred in early January, translated to a massive surge in both price and volume. LMAX Digital volumes recorded some of the highest daily volumes in January 2024 since mid-2022, including two days of volume that exceeded $2 billion.

Looking at ETF performance since the January approval, things have been quite healthy, though not without complication. The conversion of Grayscale’s GBTC product into an ETF resulted in an initial wave of selling pressure, as many investors who had been stuck in a less attractive GBTC investment looked to exit their bitcoin exposure. But we have since seen this selling pressure fade, and overall, there has been a clear balance of net inflows across the 11 bitcoin ETFs.

We believe this will help to drive plenty of demand throughout 2024 and beyond, with bitcoin and crypto assets also seen getting a boost from the bitcoin halving event in April and what should be the SEC’s approval of ether spot ETFs later this year.

As far as seasonality trends go, February has proven to be a positive month for bitcoin performance. Since 2016, bitcoin has been up an average of 2.56% in February. And technically speaking, as per our insights above, we expect bitcoin to be exceptionally well supported above $30k in 2024 ahead of the next major upside extension through $50k and towards a retest and break of the record high from 2021.