Main Points:
- Bitcoin’s extended sideways market behavior, a first for a bull run, is attracting attention.
- The influence of a premature price surge due to spot ETFs may be at play.
- 200-week moving average remains positive, ensuring stability.
- Speculation suggests that the U.S. presidential election could be causing hesitation among major investors.
- PlanB predicts a potential 7 to 10-fold price increase post-election, depending on the outcome.
Overview of the Stagnant Bitcoin Market
Bitcoin, known for its high volatility, has experienced an unusual sideways trend for the past eight months, leading many to question the underlying causes. Renowned cryptocurrency analyst PlanB, famous for his Stock-to-Flow (S2F) model, shared his views on this phenomenon in a YouTube video on October 3, 2024. According to PlanB, the market’s inertia could be linked to the upcoming U.S. presidential election in November 2024, with large investors, often referred to as “whales,” adopting a wait-and-see approach.
Bitcoin’s Bull Run and Sideways Trend
Bitcoin is currently in a bullish cycle, yet the typical price surge associated with previous bull markets in 2011, 2013, 2017, 2020, and 2021 has not materialized. Instead, prices have plateaued since March 2024. PlanB finds this stagnation highly unusual. He rejects market manipulation theories, stating that if such manipulation existed, it wouldn’t sustain the current eight-month trend. There must be other, less visible factors in play.
Premature Price Surge Due to Spot ETFs
One possible reason for the stagnation is the early price surge driven by the introduction of spot ETFs. These financial instruments allowed significant investments into Bitcoin, pushing the price to $73,000 before the scheduled halving event—a scenario that is without precedent. Typically, halving events gradually drive prices upward, but in this case, the market seems to have reacted prematurely. PlanB believes that if Bitcoin had risen more slowly, reaching $63,000 by now, the market’s perception would be entirely different. The rapid ascent followed by a prolonged sideways trend has created a sense of unease among traders.
200-Week Moving Average as a Positive Indicator
Despite the sideways movement, Bitcoin remains above its 200-week moving average, which currently stands at around $40,000. PlanB emphasizes that this is a positive sign, suggesting that the market is still healthy and poised for a future surge. The upward trajectory of the moving average indicates that Bitcoin is in a good position, even if immediate price action remains stagnant. According to PlanB, Bitcoin’s next major price movement will be triggered by external factors, possibly related to broader macroeconomic developments or regulatory changes.
Is the U.S. Presidential Election Causing the Stagnation?
A significant factor contributing to the prolonged sideways trend could be the upcoming U.S. presidential election on November 5, 2024. According to PlanB, major investors may be delaying significant moves until the election results are in. The outcome of the election could have major implications for the regulatory landscape surrounding Bitcoin and other cryptocurrencies.
If the Democratic party, led by Vice President Kamala Harris, wins, it could be perceived as a negative outcome for Bitcoin, potentially leading to stricter regulations. In contrast, a victory by the Republican candidate, former President Donald Trump, could be seen as favorable for the cryptocurrency market. PlanB suggests that investors are hesitant to take risks before knowing the political direction of the U.S. and are therefore holding their positions until November.
Price Predictions: 7 to 10-Fold Increase Possible
Despite the current stagnation, PlanB remains optimistic about Bitcoin’s long-term prospects. He predicts that the price of Bitcoin could rise by 7 to 10 times its current value once the market regains momentum, particularly after the U.S. presidential election. Whether it’s due to favorable political conditions, regulatory clarity, or continued adoption by institutional investors, the potential for a significant price rally remains strong.
The exact trigger for this price surge could vary, but PlanB points to several possibilities, including the next Bitcoin halving, the expansion of spot ETFs, and continued purchases by major companies like MicroStrategy. He also notes that Bitcoin’s current price consolidation could be setting the stage for an even bigger move in the future.
Election Uncertainty Weighs on Bitcoin
The ongoing sideways movement in the Bitcoin market can be attributed to multiple factors, including the influence of spot ETFs and anticipation of the U.S. presidential election results. PlanB believes that once this period of uncertainty passes, Bitcoin will be poised for a major price rally, potentially increasing in value by 7 to 10 times. The 200-week moving average provides a positive outlook for the market, signaling that Bitcoin remains in a healthy position despite its current stagnation. Investors and traders are now closely watching political developments, as the outcome of the U.S. election could significantly impact Bitcoin’s future trajectory.
