Bitcoin (BTC-USD) has been among the best performing assets over the past year, surging more than 135% at the time of writing. The move is due to a supply and demand imbalance caused by increasing demand for spot Bitcoin ETFs and limited supply from the recent halving event.
Analysts and observers have set bullish price targets for digital assets, but Bitcoin has yet to rally and make consistent new highs. Investors have time to increase exposure before the surge starts. Here’s why I’m increasingly bullish on Bitcoin’s prospects.
Record High Incoming
Bitcoin surged above its 200-day moving average (SMA) in October, hitting record highs over $73,000.
The rising SMA, indicating strong bullish momentum, aims to exceed its previous peak of $49,452 in February 2022.
Currently, BTC trades at $64,300, with the SMA at $47,909, a significant point for traders, as the most intense bullish cycles typically follow, surpassing previous SMA peaks.
In November 2020, six months after the third halving, Bitcoin’s 200-day SMA peaked at over $10,320. By mid-April 2021, it surged 4.5 times to $63,800.
After setting new highs in December 2016, the average spurred a 2,000% rise to nearly $20,000 in 12 months. Similar rapid rallies occurred post-second and first halvings in 2012 and 2016.
Although past data doesn’t ensure future outcomes, some patterns repeat. Bitcoin’s bear market ended in November 2022, preceding a rally as is historically seen 15 months before halving.
Bitcoin’s fourth halving occurred, halving block rewards to 3.125 BTC. Analysts predict the Federal Reserve’s potential rapid interest rate cuts because of rising government debt could support an elongated crypto uptrend.
BTC Accumulation This Year
Santiment analysts reported BTC valued at $17.5 billion. Whales holding 1,000 to 10,000 Bitcoin currently hold 1.24% of the total 21 million supply.
These analysts noted institutional investors could reduce industry volatility, leading to less selling pressure when prices surge. These players supported Bitcoin’s growth before the halving, which was anticipated to impact value significantly.
Traders are a different beast, and could buy and sell multiple times on a given day, which is why this investor base is so important.
Ki Young Ju, CEO of CryptoQuant, observed new whales investing nearly twice as much as older ones in Bitcoin. He categorized whales as those holding over 1,000 BTC, unrelated to exchanges or miners.
New whales owned coins less than 155 days old, activated by factors like U.S. spot crypto ETFs and the April halving.
Strike App and European Customers
There are other recent catalysts investors are pointing to as bullish for Bitcoin over time. Strike, a Bitcoin-based payment app, expanded to Europe, enabling BTC transactions. It recently launched in Africa and operates in Asia, the Caribbean, and Latin America.
Strike is a product of Chicago-based Zap Solutions led by entrepreneur Jack Mallers. Recently, this app has entered Europe, citing vast opportunities for Bitcoin adoption.
Strike operates like Cash App or PayPal (NASDAQ:PYPL), but uses the Bitcoin blockchain for faster and cheaper transactions.
In Europe, customers can buy, sell, and withdraw BTC directly with euro deposits through SEPA. In some regions, they can receive funds in bitcoin, euros, or USDT stablecoin.
BTC Remains a Buy
Relying solely on forecasts is risky, and Bitcoin’s future value is uncertain. Despite this reality, Bitcoin has consistently outperformed other assets.
Recent spot Bitcoin ETF launches have been highly successful, and there’s a clear supply/demand imbalance that only appears to grow.
While cryptocurrencies are volatile assets, consider allocating a portion of your portfolio to Bitcoin.
It’s the clear leader in this space for a reason, and has allowed many investors to outperform by holding relatively small positions within their portfolios for long periods of time.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
