Bitcoin and Crypto Market Could See Positive 2024 Due to On-Chain Metrics
According to CryptoPotato, Bitcoin (BTC) and the broader crypto market could have a positive year in 2024 due to the effects of several on-chain metrics. Metrics that could influence bitcoinâs positive trajectory next year include the upcoming halving, growing stablecoin liquidity, the widely anticipated spot Bitcoin exchange-traded fund (ETF) approval, and macroeconomic conditions.
CryptoQuant noted that its Bitcoin P&L Index indicates the crypto market will enter 2024 in a bull cycle as the index is above its 1-year moving average and far from the overheated area. Network metrics show a medium-term price target and cycle peak of $54,000 and $160,000, respectively, with the former representing a price resistance for 2021-2022. Bitcoinâs possible surge to $54,000 and above could be triggered by the upcoming halving, which has a track record of propelling several bull runs. The halving event will slash minersâ block rewards by 50%, reducing the rate at which BTC is produced daily. During the last cycle, BTCâs price increased eight times after the halving. The asset has also rallied for 1-1.5 years following the event on several occasions.
In addition, the Fedâs expectation of lower interest rates in 2024 due to declining inflation could help BTC stay positive. The crypto community also awaits the approval of multiple spot Bitcoin ETFs. The new products could push BTCâs market cap above $930 billion as more than $150 billion is expected to enter the network after the United States Securities and Exchange Commission (SEC) approves the funds by January. The rise in stablecoin liquidity could also drive Bitcoinâs positive 2024. The total market cap of stablecoins has seen an $8 billion increase since October, showing more liquidity in the market. Such growth is generally associated with a rally in crypto markets.
However, CryptoQuant noted the risks of a price correction in the short term. This could stem from short-term BTC holders experiencing high unrealized profit margins, which historically precede price corrections. The Bitcoin Miner Profit/Loss Sustainability is indicating that the value of block rewards has increased to unsustainably high levels, meaning that prices are likely to enter correction mode.