Macro crypto currency market outlook

Bitcoin looks to be nearing the end of a massive consolidation since putting in a record high back in March of this year. The consolidation is roughly defined by a 25,000 range between $50k and $75k. This is important as the target range for breakouts is often equivalent to the size of previous ranges. In this case, once we take out the March high, this would project a 25,000 move that would take us right up towards the much talked about and massive psychological barrier at $100k. Only back below the August low would negate.

Bitcoin is looking strong as we come into the final months of the year. We’ve just come out of another double-digit October performance, with bitcoin closing out the month +11%. Indeed, the returns are slightly more modest than bitcoin’s historical October returns which have exceeded 20% from 2013 to present. Nonetheless, when considering this year’s price consolidation and proximity to a fresh record high at a time when there is plenty of uncertainty in global markets, the performance is rather impressive.

As far as uncertainty in global markets goes, a lot of that attention has been around US election risk. The battle for the next President has been a deeply contested and tight one. Financial markets will need to take time to react to and digest the early November election result. This has also translated to cautious trade ahead of the event risk.

Ultimately, as this relates to the outlook for bitcoin and crypto assets, we don’t believe there will be much impact other than short-term volatility in the immediate aftermath. We believe the most important takeaway with respect to the election is what we’ve already learned over the past several weeks – namely the fact that both parties have recognized the important innovation in the space, while showing a clear willingness to support the emerging industry and asset class.

This puts the focus back on all of the other major market drivers, which all suggest we should see higher prices for crypto assets over the coming months. These drivers include strong Q4 performance metrics, widespread acceptance and adoption in 2024 by way of the bitcoin and ETH spot ETFs in the US, deeper coverage at banks and institutions, more recognition of strategies incorporating bitcoin into corporate balance sheets, and central bank policies inviting higher inflation and a natural desire for market participants to be wanting to look to diversify into limited supply assets.

As a final note, we think it will be important to keep an eye on the price of ETH over the coming days and weeks. ETH has been a clear underperformer relative to bitcoin in 2024. But there are signs ETH could be wanting to breakout to the topside. The key level to watch comes in the form of the August 24 high at $2,820. A break above this level will likely open the door for a bullish breakout and acceleration to the topside which ultimately could set the stage for a push towards a retest of the record high from 2021at $4,870.