Summary:
Bitcoin found support after a recent pullback, potentially setting the stage for another rally.
Analysts predict a third attempt to break through the $65k - $73k resistance zone, with a potential target zone of $105k - $109k in 2024.
The macro environment is favorable for Bitcoin, with a positive correlation to gold and an inverse relationship to US bond yields.
Bitcoin's outperformance against gold since 2022 indicates a potential reassertion of its dominance.
Inside Edge Capital is bullish on Bitcoin and has added a 2% holding of the new iShares Bitcoin Trust (IBIT) to their portfolio.
Bitcoin: Poised for Another Rally?
Following a recent pullback, Bitcoin has found support and is primed for another climb. Analysts at Inside Edge Capital, using Elliott Wave analysis, believe support has formed around $59k - $49k, potentially setting the stage for a third attempt to breach the $65k - $73k resistance zone.
The bullish prediction points to a potential target zone of $105k - $109k in 2024.
A Look at the Macro Environment
While there may be short-term headwinds from the possible influx of Bitcoin supply, there are also macro tailwinds that could fuel the rally.
- Gold and Bitcoin: These assets exhibit a strong positive correlation, likely due to their inverse relationship with US bond yields.
- Inflation and Interest Rates: Higher inflation and interest rates negatively impact Bitcoin, gold, and the stock market. However, if the market remains bullish, higher Bitcoin and gold prices could lead to lower interest rates.
Bitcoin vs. Gold: A Tale of Two Assets
Bitcoin has significantly outperformed gold since the 2022 lows, with a 280% rally compared to gold's 45%. This outperformance, evident in the weekly ratio chart of Bitcoin/Gold, indicates Bitcoin is poised to reassert its dominance over gold.
Inside Edge Capital's Strategy
The firm believes Bitcoin and gold will rise alongside lower US yields, with Bitcoin expected to outperform gold. They have recently added a 2% holding of the new iShares Bitcoin Trust (IBIT) to their Tactical Alpha Growth portfolio, signaling their bullish sentiment.
Disclaimer: This content is for informational purposes only and does not constitute financial advice. Please consult with a qualified financial advisor before making any investment decisions.
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