{"id":26840,"date":"2024-01-05T14:21:04","date_gmt":"2024-01-05T14:21:04","guid":{"rendered":"https:\/\/nftandcrypto-news.com\/crypto\/holiday-price-action-signs-of-the-next-crypto-bull-run\/"},"modified":"2024-01-05T14:21:07","modified_gmt":"2024-01-05T14:21:07","slug":"holiday-price-action-signs-of-the-next-crypto-bull-run","status":"publish","type":"post","link":"https:\/\/nftandcrypto-news.com\/crypto\/holiday-price-action-signs-of-the-next-crypto-bull-run\/","title":{"rendered":"Holiday price action: Signs of the next crypto bull run?"},"content":{"rendered":"
As 2023 drew to a close and with the start of 2024, the crypto market is once again experiencing a resurgence, one that is reminiscent of the bull run witnessed back in December 2020.\u00a0<\/p>\n
The ongoing revival has brought with it a renewed sense of optimism and potential, with investors hoping for a major turnaround. <\/p>\n
To this point, since the start of 2023, the market capitalization of the digital asset sector has boomed from $831 billion to over $1.8 trillion, thereby showcasing a growth of nearly 100%.<\/p>\n
Thanks to this recent uptrend, it is but natural that people have started drawing parallels between the holiday price action of the last bull run and the current market. However, is this resemblance merely coincidental, or are we witnessing the cyclical nature of the crypto market at play? <\/p>\n
Antoni Trenchev, co-founder and managing partner at cryptocurrency lending company Nexo, believes that the ongoing price action reflects the 2020\u20132021 holiday period, which he marked as a prescient moment, heralding the last major bull run before cryptocurrency entered the mainstream. He added:<\/p>\n
\u201cBack then, the market\u2019s upturn proved to be far more than merely seasonally uplifted prices. Arriving mere months before the April 2020 Bitcoin halving and riding the wave of enthusiasm around crypto ETFs [exchange-traded funds], this rally was a harbinger of an unprecedented surge in crypto valuations.\u201d<\/p><\/blockquote>\n
Now, at the tail end of the 2023\u20132024 festive season, Trenchev believes that we find ourselves on the cusp of another exciting chapter. <\/p>\n
\u201cWith an early \u2018Santa Rally\u2019 already glimmering on the charts and the Bitcoin halving slated for April 2024, we are optimistically poised for what could be another surge, and the bulls are only just warming up,\u201d he said.<\/p>\n
Circumstances around crypto bull runs<\/h3>\n
Jupiter Zheng, partner at institutional asset manager HashKey Capital, told Cointelegraph that, while there are undoubtedly several holiday factors influencing the ongoing market growth \u2014 akin to what was witnessed a couple of years ago \u2014 there are other peripheral drivers to consider this time around, adding:<\/p>\n
\u201cCurrently, we have the looming introduction of spot BTC exchange-traded funds (ETFs) and the upcoming halving event in 2024, along with the rapid expansion of the Bitcoin ecosystem, which includes the introduction of new layer-2 solutions and inscriptions. Additionally, the change in the Federal Reserve\u2019s stance from hawkish to dovish also has had a positive impact on risky assets.\u201d<\/p><\/blockquote>\n
Expanding on Zheng\u2019s narrative, Ryan Lee, chief analyst at Bitget Research, believes that, while drawing parallels between the 2020\u20132021 bull run and the current crypto market scenario is certainly helpful, this time around, the market is being heavily influenced by different macro conditions, including regulatory updates, technological advancements and shifting investor sentiment. <\/p>\n
He noted that, while the last bull run was shaped by specific circumstances, like the COVID-19 pandemic, which spurred quantitative easing and institutional investments, this run is being driven by fluctuating inflation rates, interest rate changes and geopolitical tensions. <\/p>\n
Additionally, financial indicators like the drop in the U.S. 10-year Treasury yield and a decrease in the U.S. Dollar Index (a measure of the U.S. dollar\u2019s value relative to the majority of its most significant trading partners) have created a favorable environment for Bitcoin (BTC).<\/p>\n
Recent:\u00a0Bitcoin ETFs are coming, but what about BTC stocks and trusts? <\/em><\/strong><\/p>\n
Further bolstering this trend is some optimistic economic data that has emerged, with Lee noting that the U.S. gross domestic product has outperformed expectations, while the Personal Consumption Expenditures (PCE) price index (a measure of consumer spending on goods and services among households in the U.S.) has also shown moderation, staying relatively stable all through 2023. He further added:<\/p>\n
\u201cThe likelihood of the Federal Reserve maintaining its current policy stance into December has risen above 80%, providing relief to market pressures that have been intensified by this year\u2019s challenging macroeconomic environment.\u201d<\/p><\/blockquote>\n
Could we witness a crypto rally in the coming weeks?<\/h3>\n
While the ongoing price action is certainly promising, the market still seems to have not been able to break past the $1.7-trillion threshold cleanly.<\/p>\n
Zak Taher, CEO of MultiBank.io \u2014 the digital asset wing of the MultiBank Group \u2014 told Cointelegraph that his team didn\u2019t anticipate prices to start skyrocketing anytime soon, but given the current market conditions, it does seem as if a major rally may be in the offing: \u201cWhile short-term market movements can be influenced by various factors, including the greed index, sentiment and market speculation, predicting with certainty whether this rally will evolve into a full-blown bull market in the near to mid-term is challenging.\u201d<\/p>\n