The surge in Bitcoin’s price to a staggering $69,000 has been met with genuine interest from institutional investors, driving inflows to Bitcoin exchange-traded funds (ETFs) to a remarkable $7.35 billion in 2024. This influx of institutional capital has been identified as a primary catalyst behind the ongoing bullish momentum in the cryptocurrency market, as highlighted in a recent Bloomberg report.
Typically, the lead-up to Bitcoin’s halving event has been accompanied by price downturns in previous instances. However, renowned crypto expert Capo, often referred to as a “perma bear” due to his persistent bearish stance on Bitcoin, has predicted a potential decline in BTC price to $45,000. Citing the Federal Reserve’s implementation of high-interest rates, Capo outlined the potential impact of such measures on Bitcoin’s valuation.
In his analysis, Capo emphasized the adverse effects of prolonged high interest rates on the economy, mainly through a phenomenon known as Quantitative Tightening (QT). This strategy, employed by central banks to curb inflation and regulate economic activity, can inadvertently lead to recessions and market corrections. With countries like the UK and Japan already signaling economic downturns, Capo suggested that Bitcoin’s correction to $45,000 could be deemed a fair valuation in light of prevailing market conditions.
Despite his bearish outlook, Capo acknowledged the current bullish sentiment prevailing in the market following Bitcoin’s surge to a new all-time high. However, he cautioned that a dip below the critical $60,000 threshold would serve as the first confirmation of a bearish trend, potentially signaling a reversal in momentum. Technical indicators such as Bitcoin’s 1-Day RSI reading of 71.92, indicating overbought conditions in the short term, further bolstered Capo’s cautious stance.
The recent ascent in Bitcoin’s price beyond the $65,000 mark for the first time since November 2021 has underscored the growing demand for BTC from US-listed ETFs. With institutional investors increasingly allocating significant capital to cryptocurrency assets, Bitcoin’s price trajectory remains subject to the ebbs and flows of institutional sentiment.
