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With Bitcoin ETFs around the corner, Bitcoin has been one of the most talked-about crypto in 2023. With its meteoric recovery in 2023, followed by a fair share of corrections, many people wonder what Bitcoin’s future holds.
This research report will provide an in-depth analysis of Bitcoin, including Bitcoin On Chain analysis, Sentiment analysis, market data, and derivatives analysis. So, what does the future hold for the crypto market? The answer looks bearish, but the bullish beacon of hope can be found with deeper analysis.
This report aims to provide readers with a comprehensive understanding of Bitcoin and its potential future.
So, if you are interested in Bitcoin or simply curious about this fascinating asset, this report is for you. Read on to learn more about Bitcoin and its potential future.
Bitcoin Takes A Backfoot Stand
With a third bearish week, Bitcoin prices experience a growth in selling pressure, with a 3.97% drop in market value. The oldest crypto maintains an overall positive trend with a Year-to-Date (YTD) growth of 75.49%. Currently trading at $29,047, Bitcoin prices with a market capitalization of $564.825 Billion are below the 50-day EMA and approach the 200-day EMA.
The Fear & Greed Index, a popular tool to gauge market sentiment, currently stands at 50. This value suggests a balanced market sentiment, with neither excessive fear nor greed dominating the market.
Coming to the Netflow of Bitcoin on all exchanges, the Netflow is continuing to resurface into positive territory. The Netflow indicator, which measures the inflow and outflow of coins from exchanges, shows a negative value of 1.255K. The increasing Netflow projects a potential rise in selling pressure over the spot exchange, with an increase in volatility in the derivates market.
Moreover, the Miners’ Position Index at 0.30 shows the recent spikes in the MPI value, creating lower highs over the week. Despite the recent stand in the positive range, the MPI value is expected to continue the lower highs trend. This projects the growing optimism of Bitcoin Miners as they hold onto their coins, expecting a rise in BTC price.
Bitcoin Mining Stocks Outshine BTC
Bitcoin mining stocks have been the star performers this year. A report by Seeking Alpha highlights Riot Platforms, a leading Bitcoin miner. Riot’s ambitious plans to triple its mining capacity by 2024 could be hampered by the upcoming Bitcoin halving, cutting miners’ rewards by half.
Moreover, miners like Riot often fund their operations by issuing new equity shares, which can dilute the value of existing shares. This could impact the share price, regardless of the company’s solid fundamentals.
Despite the stellar performance of mining stocks in 2023, an uptick in Bitcoin being sent to exchanges could hint at a loss of momentum. As a result, a substantial increase in Bitcoin’s price is necessary for miners to stay profitable at current hash rate levels.
The report suggests that Bitcoin may need to hit nearly $100,000 for miners to maintain their operations. This makes holding Bitcoin mining stocks a risky bet, as current valuations may not fully account for the impact of next year’s Bitcoin halving.
In contrast, a Matrixport report predicts that Bitcoin could reach $45,000 by year-end and $125,000 by the end of 2024.
Bitcoin Market Indications
The Estimated Leverage Ratio (ELR) on all exchanges has increased over the past four months. The ELR has increased from 0.19 in April to 0.26 in August, with a recent spike to 0.27 on June 20. This indicates that traders opt for more leveraged positions, increasing the risk of a long squeeze.
The Adjusted SOPR, a metric that measures the profit ratio of coins moved on-chain, adjusted to ignore all outputs with a lifespan of less than one hour, is finally 1.03. The aSOPR has recovered sharply over the last week to reach 1.03, suggesting that people move coins at a profit on average, indicating bullish sentiment.
The Stablecoin Supply Ratio (SSR) currently stands at a low of 8.35. The SSR is a metric that measures the global stablecoin supply relative to Bitcoin’s market cap. A lower SSR often indicates a bullish market sentiment.
The reason is simple: when the SSR is low, there’s a larger supply of stablecoins than Bitcoin’s market cap. This suggests that more potential buying power is ready to flow into the market, which can push prices up.
In our current scenario, an SSR of 8.35 suggests a significant amount of stablecoin ready to enter the market, potentially leading to a price appreciation in Bitcoin and other cryptocurrencies.
Tether Goes Crazy For Bitcoin
Tether, the company behind the USDT stablecoin, has reported over $1 billion in quarterly profits. Despite its small team of 60 and a history of controversy, these figures are hard to ignore.
Tether’s latest report reveals it holds $55.8 billion in U.S. Treasury bills. Moreover, Tether’s total assets exceed $86 billion, surpassing USDT’s current market cap. This profit is primarily due to the rise in interest rates and Tether’s vast holdings of U.S. Treasuries.
With this newfound profitability, speculation about Tether’s future investment plans is rife. The company already holds $1.7 billion of bitcoin and invests in sustainable bitcoin mining in Uruguay and a Georgia-based payment processor. More Bitcoin purchases or company investments could be on the horizon.
However, Tether’s cash balance has reduced to just $90.8 million from $481 million in March 2023 and $5.3 billion in December 2022. While U.S. Treasuries are similar to cash, a lack of actual cash could be problematic if there’s a rush for USDT redemptions.
Bitcoin’s landscape is full of exciting signals. Despite a recent dip, Bitcoin’s growth this year is positive. The Fear & Greed Index shows a balanced market sentiment.
Bitcoin mining stocks, like Riot Platforms, are on the rise. But, the upcoming Bitcoin halving and potential share dilution could be challenges.
Market indicators like the Estimated Leverage Ratio and the Adjusted SOPR show mixed signals. Traders are taking more risks, but coins are being moved profitably. The low Stablecoin Supply Ratio suggests huge stablecoin supply could enter the market. This could push Bitcoin and other cryptocurrencies’ prices up.
Coming to the exciting part: Bitcoin could hit nearly $100,000 for miners to keep their operations. Some predict Bitcoin could reach $45,000 by year-end and $125,000 by the end of 2024. And the chance to be part of this growth is now.