Matrixport, a digital asset financial services group born from Bitmain, an industry leader in Bitcoin mining, projects a bullish breakout for Bitcoin in the upcoming fourth quarter of 2024. In their latest research report titled “Matrix on Target: Bullish Prospects for Bitcoin in Q4,” the firm provides four reasons to be bullish in the upcoming weeks.
#1 Narrowing Trading Range Signals Breakout
Matrixport’s analysis begins with a technical assessment of the recent Bitcoin price action. Historically, Q3 has posed significant challenges with frequent breakout failures. This year, however, Bitcoin has demonstrated a notably narrowing trading range, a pattern typically preceding significant price volatility. “The constriction of price movement is often a precursor to dynamic price shifts, suggesting an impending breakout,” the report notes.
#2 Monetary Policy As A Bitcoin Catalyst
A pivotal aspect of the report focuses on the US Federal Reserve’s interest rate policies. Currently, the Fed maintains a rate of 5.25%, in contrast to a 3.0% inflation rate.
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However, recent comments from Fed Chair Jerome Powell have ignited speculations of a possible rate cut with the September FOMC meeting. “If inflation follows the projected path, an interest rate cut in the September meeting is possible,” Powell indicated.
Matrixport’s analysis correlates these potential rate cuts with increased market liquidity, which historically benefits risk assets like Bitcoin. “Each quarter-point reduction by the Fed could inject substantial liquidity into the market, enhancing the appeal of non-traditional assets,” the report elaborates.
#3 Impact Of The US Presidential Election
The upcoming US Presidential election also features prominently in Matrixport’s forecast. The firm speculates on the impact of a potential re-election of Donald Trump, noting his previous administration’s relatively hands-off approach to crypto regulation. “A re-election of Trump could renew vigor in regulatory reform or laxity, providing a less uncertain landscape for crypto innovations,” the report suggests.
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Trump’s recent appearance at the Nashville Bitcoin conference, although not meeting some expectations, was perceived largely positively, signaling potential supportive stances on cryptocurrency if re-elected. Trump promised to sell the Bitcoin previously confiscated by the US government and establish a “national stockpile” of Bitcoin.
As reported by NewsBTC, this action, if it comes to fruition, could have substantial implications for the game theory of BTC. It could spark a race for a quick allocation, with nations printing money to buy as much Bitcoin as possible.
#4 Seasonal Patterns Of Bitcoin
The report also delves into the seasonal patterns affecting Bitcoin’s performance, highlighting the typically sluggish months of August and September. This pattern is attributed to lower trading volumes during the summer vacation period and market caution in anticipation of economic indicators and central bank policy decisions in the fall.
However, Matrixport posits that this year’s unique economic and political context could disrupt these usual trends, setting the stage for an unseasonal rally.
Conclusively, Matrixport maintains a cautiously optimistic stance for Bitcoin’s performance in Q4 2024. “Considering the confluence of a narrowing price range, likely easing of US monetary policy, and the potential impacts of the US Presidential election, we are poised to witness a significant bullish breakout in Bitcoin’s price trajectory,” the report concludes.
At press time, BTC traded at $64,730.
Featured image created with DALL·E, chart from TradingView.com