Bitcoin on Track for Rally Ahead of Halving, Says 10X Research
Bitcoin (BTC) has had a stellar few months, with bulls ignoring a resurgent U.S. dollar and Treasury yields to push the leading cryptocurrency to the highest level since late 2021, according to a study by 10X Research. The research firm analyzed past data and the relative strength index (RSI) – a technical analysis indicator – to predict the future trajectory of Bitcoin prices.
Bitcoin Halving Cycles Show Uptrends
The theory that Bitcoin bottoms out 12-16 months ahead of halving and follows uptrends before and after the event is well-known. The previous three halving cycles have shown that prices surged by over 30% in eight weeks leading up to the event, which reduces the pace of supply expansion by 50%. The upcoming halving on April 19 is expected to halve the per-block reward to 3.25 BTC from 6.5 BTC.
Markus Thielen, founder of 10X Research, revealed, “Bitcoin rallies an average of 32% in 60 days ahead of the halving.”
At the time of writing, Bitcoin is trading near $52,000. Based on past data, a 32% rally from this level could drive prices close to the record high of $69,000 on or before the halving day.
Bullish Sentiment Fuels Bitcoin ETF Buying
The TradeFi community is aggressively buying Bitcoin ETFs ahead of the halving, driven by the bullish perception within the crypto community. Strong inflows into U.S.-based spot exchange-traded funds (ETFs) suggest traditional investors have caught the bullish mood. Regulated ETFs provide investors with exposure to cryptocurrencies without the need to store coins securely.
Technical Analysis Supports Potential Rally
The 14-day relative strength index (RSI) crossed above 80 last week, signifying a strong upward momentum in Bitcoin prices. 10X Research indicates that 12 out of 14 previous instances of such RSI signals preceded accelerated uptrends, resulting in an average gain of 54% in the following 60 days. Based on this historical observation, Bitcoin could rally to $74,600.
It’s important to note that past performance does not guarantee future results, and macroeconomic factors could significantly influence market trends.
Risk-Taking Supported by Macro Picture
The macroeconomic landscape appears favorable for increased risk-taking, with the U.S. implementing highly stimulative fiscal policies. Goldman Sachs has raised its year-end forecast for the S&P 500 by 4% to 5,200, anticipating robust global economic growth and a weaker dollar.
