5 Factors That Will Start The New Bitcoin (BTC) Bull Run

After hitting a record high of $67,600 on November 9, 2021, Bitcoin entered a strong downtrend for two and a half months, dropping as low as $35,200 on January 23. Reacting from this level and rising to $47,500 again on March 30, BTC continued its bear season with two major crashes on May 6 and June 10, with the combination of many successive factors.

all over the world in the last 40 years seen highest inflationAt the end of the fuel crisis, the logistics crisis, the great increase in energy prices that also affected BTC mining, the Russia-Ukraine war, the monetary policies of the countries, the recession and many other factors, Bitcoin will start the bull run again one day. in this content 5 factors that will start the new Bitcoin bull run What is it, we’re going to talk about them.

Stagnation of the Effect of Fed Rate Decisions

After inflation started to show itself in the world, the US Federal Reserve Bank gave the signals that it might increase interest rates 5 or 6 times in a row. The policy rate in the USA rose to 2.25%, with the rate hikes by 25 basis points in March, 50 basis points in May, and 75 basis points in June and July.

The overall purpose of the rate hike is to help people keep their money safe by protecting it from inflation. Although all countries in the world have increased interest rates, the USD appreciated against almost all currencies. While 1 USD was 8.30 TL a year ago, it is now 18.19 TL, 0.85 EUR, while it is now 1 EUR and 0.73 GBP, it is now 0.86 GBP.

European countries were more affected by the crisis than the United States. However, financial markets, especially the cryptocurrency market, are pre-priced according to rumors and speculations of monetary policy decisions.

While the FED is expected to increase interest rates between 50 and 75 basis points at the meeting in September, knowing this will quickly change the BTC price for an hour when the interest rate hike is announced, but will bring the price back to its previous state.

If an increase is made by 25 basis points, we can see a rapid rise, and if an increase is made by 100 basis points, we can see a rapid decline. In any case, the moment inflation shows net downward trends and the interest rate begins to gradually cut, it will be a cornerstone for Bitcoin to start a new bull run.

Bitcoin Halving

Bitcoin halving is a protocol developed by Satoshi Nakamoto in order for Bitcoin to remain a deflationary currency as a store of value and continue to increase its value over the years. A halving occurs every four years. This, Bitcoin miners block rewards halved means.

With the halving in May 2020, the reward for creating a block on the Bitcoin network is 6.25 BTC. After the halving in May 2024, the reward will decrease to 3,125 BTC. So the same hash rate, same difficulty, less reward is an important factor to make Bitcoin a more valuable asset. When we examine the 2012, 2016 and 2020 halving periods, we can see that the BTC price has rallied for at least a year with the halving.

Usually, a ceiling price is seen at some point between the 350th day and the 500th day, and then a bottom price occurs between the 750th day and the 1000th day.

The good news is that it has been about 850 days since the 2020 halving. Although there is no rule that a single data will always repeat, we may have seen the bottom in BTC price or within 250 days. Since the price movements after the bottom will also be up, it means that the halving is approaching. bull run start means.

Low Investor Hopes

Bitcoin has repeatedly bottomed and risen to record highs in its relatively short history. The end of a bear season usually happens after the vast majority of small investors spoil their investments with losses and turn to different areas.

Small and short-term investors are often impatient and aim to double their investment in just a few days or weeks. However, like all other investment tools, cryptocurrencies generally delight long-term investors.

Small investors losing their patience, losing hope that the market will rise again, losing faith in the blockchain world are a sign that the market has bottomed out and a bull run may begin with new entrants.

End of War & Ease of Tensions Between Great Powers

The war between Russia and Ukraine, which started in February 2022, is still ongoing. As a result of the war, which sometimes took place violently in the squares and often at the table, many countries in the world, especially NATO countries, imposed restrictions against Russia.

Following this, crises began to occur in oil, natural gas, grain and many other products imported from Russia to the world. When the tensions between China and Taiwan following this war, Boris Johnson’s resignation in the UK government, and global financial factors were added, all world markets and stock markets, including cryptocurrencies, were negatively affected.

Even the Nasdaq’s most preferred index, the S&P 500, is 16.90% below its price at the beginning of the year. In the meantime, investors are hesitant to enter the crypto money market and can transfer their money to commodities or deposits, which they see as a safer haven, when interest rates are high.

When tensions abate between major governments and steps are taken for a ceasefire in the war, many obstacles will be removed for the new bull rally for cryptocurrencies to begin.

Large Investors Confidence in Money Markets

We talked about small investors fleeing the crypto market, just as important a factor is that big investors are starting to trust the money markets. Inflation is 8.50% in the USA and 9.10% in the Eurozone.

These two levels are the highest in the last 40 years. The shrinking of the US economy for two consecutive quarters creates fears of recession, that is, financial recession. The IMF lowers its forecast for US and global economic growth in 2022 and 2023 more and more in every report.

The increase in interest rates, the volatile economy and the reduction of the tensions mentioned in the above article will prevent recession fears and lead to a downward trend in inflation.

Tesla, one of the largest institutional investors in Bitcoin, announced in its second fiscal quarter report that it sold $ 936 million worth of BTC. MicroStrategy, Galaxy Digital Holdings, Voyager Digital LTD, Tesla (25% of their investments still stand), Marathon Digital Holdings and many other large institutions have Bitcoin investments.

New crypto money investments from these institutions and other institutions will also mobilize other investors who are undecided about the market.

Conclusion

What has historically caused the Bitcoin price to rise and fall is more or less clear. In particular, governments’ interest rate hikes and Bitcoin halvings cause net changes in the price of Bitcoin as they follow patterns determined by the law of supply and demand.

While the demand for Bitcoin is at the same level or increasing, halving the amount of new Bitcoin to be issued with halving will directly affect the price.

Bitcoin has been a good store of value since its launch. digital gold We can say that Bitcoin is very close to the bottom level, which is called Bitcoin and has a limited supply advantage compared to gold.

It is not investment advice.