Is this Bitcoin rally for real? … two big drivers of selling pressure are behind us … the catalysts that could push the sector higher … Bitcoin at $3.8 million?

As I write Tuesday morning, Bitcoin is up 19% in about two weeks.

Is this rally a “dead-cat bounce” or the beginning of the long-awaited post-halving surge?

Let’s go to our crypto expert Luke Lango from this weekend’s Ultimate Crypto update:

We believe the long overdue crypto summer surge is finally here…

This looks like a great time to be buying top cryptos on the rebound.

The “big picture” story here is simple.

Crypto markets always boom a few months after a Bitcoin Halving event. It has happened every time. In the First, Second, and Third Bitcoin Halvings, cryptos fell flat for a few months and then absolutely surged for about 12 months.

Take a look at the following chart, which shows the direction we expect BTC to follow:

Many, including us, expected a surge after the Fourth Bitcoin Halving in April. However, various headwinds have delayed this surge and kept crypto prices depressed.

These headwinds include interest rate concerns, political uncertainty, and forced liquidations from Mt. Gox, Saxony, and others.

Those headwinds are now abating for the first time since the halving. More than that, they are being replaced by tailwinds in some instances.

This sets the stage for the long overdue post-halving surge in cryptos to finally begin.

As Luke just noted, Bitcoin has faced major headwinds in recent weeks – two of which represented direct selling pressure

The first was Germany’s sale of 50,000 bitcoins, acquired from a movie piracy website.

Germany completed its sales on July 13, and the market has now fully digested the wave of new supply.

On a funny side note, someone created a website calculating how much money the German government would have right now if it had held its bitcoin instead. As I write, based on Bitcoin’s recent rally, the number clocks in at ~2,885,500,000 dollars.

The second source of selling pressure came from profit-taking from Mt. Gox creditors who received their bitcoin that had been frozen since the Mt. Gox platform went under in 2014. There were roughly 141,000 of these released bitcoins.

Luke writes that Mt. Gox has reportedly distributed nearly 40% of its seized bitcoin, and yet we’ve seen no massive profit-taking. Instead, online polls indicate many Mt. Gox creditors plan to hold their bitcoin after distribution.

So, from a defensive perspective, the sector has made it through a tough stretch without buckling.

But what about offense? Do we have any catalysts that might drive Bitcoin higher in the coming months?

The potential bullish drivers of a new crypto boom

As I write, the odds put former President Donald Trump as the most likely to win the White House in November. The crypto market likes this.

First, there’s Trump himself who has flip-flopped on his position on Bitcoin. Whereas he was a critic several years ago, today, he pitches himself as the crypto president.

Here’s Trump from posts on Truth Social:

Bitcoin mining may be our last line of defense against a CBDC.

Biden’s hatred of Bitcoin only helps China, Russia, and the Radical Communist Left. We want all the remaining Bitcoin to be MADE IN THE USA!!! It will help us be ENERGY DOMINANT!!!

While Trump’s about-face on crypto might raise some eyebrows, his vice presidential pick JD Vance appears to be far more of an authentic crypto advocate.

Here’s Financial Times:

In JD Vance, bitcoiners see one of their own.

Not only does the Hillbilly Elegy author own a lot of bitcoin (at least he did in 2022, his most recent financial filings show) but he’s championed crypto as an alternative to mainstream finance.

This is music to the ears of an industry that sees itself as the victim of baseless hostility from US regulators.

“Overall, it’s a positive thing for crypto because the current administration and regulatory situation in the US has been very challenging,” said Alexander Blume, chief executive of trading company Two Prime. “It pretty much could only get better.”

Vance has been a vocal critic of SEC Chair Gary Gensler, who in recent years has gone after crypto platform Coinbase and crypto-coin Ripple. Vance said Gensler’s approach to the crypto market and its regulation/adoption “is the exact opposite of what it should be.”

Here’s Luke’s take:

With odds of a Trump/Vance ticket winning in November on the rise, crypto investors are growing more and more hopeful for a friendlier regulatory backdrop over the next few years.

As those hopes build in the coming months, cryptos should charge higher.

Meanwhile, another catalyst began this morning

Today, five spot Ethereum ETFs launched, marking yet another milestone in the increasing integration of digital assets and traditional finance.

Experts suggest this could drive a 25% rally in Ether over the coming months. Part of this buying demand will come from deep-pocketed institutions.

Here’s Coin Telegraph on that:

Increased demand from institutions looking to fill their exchange-traded funds with Ether could spark a supply crunch. The Ethereum Exchange Reserve, a metric tracking the amount of Ether available for purchase on cryptocurrency exchanges, is at multi-year lows.

A recent Kaiko report also touched on Ether’s 1% market depth and suggested that lower liquidity could spark increased price volatility, sending the price of Ether higher in the face of increased demand and potentially outperforming Bitcoin in percentage terms.

Returning to Bitcoin, another potential catalyst is its technical set-up

As Bitcoin goes, so goes the broader crypto market. So, any forecast of the altcoin sector begins with an assessment of Bitcoin’s most likely direction.

Fortunately, Luke writes that Bitcoin’s technical charts suggest coming bullishness:

In this this very powerful bounce off the bottomside of its technical uptrend channel, Bitcoin has retaken its 20-, 50-, 100-, and 200-day moving averages.

It has also broken above its downtrend resistance line from the early March highs.

The Relative Strength Index (RSI) has shifted from oversold to nearly overbought. And it has successful executed a bullish Moving Average Convergence Divergence crossover (MACD).

This technically looks like a very strong and promising bounce. As you can see in the chart below, all technical signals suggest it will continue, with BTC soaring to new highs very soon:

So, where is Bitcoin’s price headed?

Last week, billionaire investor Mark Cuban wrote on X:

How high can the price [of bitcoin] go. Way higher than you think. 

Remember, the market for BTC is global.  And the supply has a final limit of 21m BTC, with unlimited fractionalization.

Keep that in mind as you consider what happens if because of geopolitical uncertainty and the decline of the dollar as the reserve currency, BTC becomes a “safe haven” globally.  Which means that BTC could be what countries and all of us look to buy as a means to protect our savings.

Crazy? It already happens in countries facing hyperinflation. 

And if things really go further than we can imagine today (and I’m not saying they will.   Just that this has a possibility somewhere above zero) , then BTC becomes exactly what the Maxis envision. 

 A global currency.

Whether you believe in that vision or not, the potential for a Bitcoin moonshot is realistic enough that owning just a small allocation is a wise move. Think of it as “safety insurance” against roaring FOMO (fear of missing out).

So, how much “missing out” are we talking about?

Well, first, there remain plenty of analysts calling for Bitcoin’s complete collapse. These crypto bears have always been around and will continue to be.

But the bullish forecasts are more interesting.

Independent market analyst Arsen suggests that Bitcoin’s latest 800-day cycle will end with Bitcoin at $330,000 by roughly mid-2026.

Meanwhile, famous money manager Cathy Wood of Ark Invest has raised eyebrows by predicting that Bitcoin will hit $3.8 million per coin by 2030. That’s a gain of roughly 5,800%.

This appears highly unlikely, given that it represents a Bitcoin market cap of almost $80 trillion. For perspective, the U.S. economy is worth roughly $28 trillion.

Meanwhile, the popular Bitcoin Stock to Flow Model suggests the cryptocurrency will be at $363,000 by early-January of next year. Bitcoin is tracking behind that goal today. This same model suggests the token should be trading at roughly $166,000 (as I write, it’s at about $67,000).

For Luke, he’s eyeing $100,000 over the coming quarters

And given the recent bullish sector set-up, he’s suggesting this is a good time to buy top altcoins if you’ve been on the sidelines, waiting for an opportunity.

We’ll give Luke today’s final word:

Last week, we told you that we were cautiously optimistic. This week, we are fully optimistic.

The fundamentals and technicals across the crypto markets have meaningfully improved over the past week in a manner consistent with a huge rebound rally over the next few months.

Considering how this timing fits within the context of the Halving Cycle, we think this rebound rally could be the start of a surge in BTC to $100,000, and a massive run-up in smaller altcoins.

We’d be buyers on this bounce.

Have a good evening,

Jeff Remsburg