Benzinga - by Murtuza Merchant, Benzinga Staff Writer.
Bitcoin (CRYPTO: BTC) is poised for a potential rally to new all-time highs, with a peak target of at least $120,000 during the current cycle, acording to a new analyst report.
10x Research, authored by Markus Thielen, sees a head-and-shoulders formation formation for Bitcoin that could soon break through the resistance line, possibly pushing its price toward $83,000 in the near term.
Key Factors For Bitcoin's Rally Several factors are contributing to this bullish outlook.
Thielen points out, “It is only a matter of time until Bitcoin makes a new all-time high.”
The recent global central bank easing cycle, with interest rate cuts in Canada, Denmark and Europe, is fostering a favorable environment for risk assets.
This macroeconomic backdrop, combined with weakening US growth, employment and consumer spending, suggests that inflation will slow, which is positive for Bitcoin.
Impact Of Institutional Inflows Institutional investors are playing a significant role in driving Bitcoin's price.
The report highlights that $1 billion in daily inflows from new large Bitcoin investors is critical.
However, for Bitcoin to reach $83,000, approximately $13 billion in inflows across various channels is required.
Thielen explains, “A breakout above the $71,600 trend line will naturally result in more upside buying through multiple products, but $+13bn requires quite some commitment.”
Also Read: Bitcoin Spikes To $72K, Then Drops $1,300 Following US Employment Report: What Happened?
Challenges And Dependencies Despite the optimism, there are potential hurdles. A sharp decline in Ether prices could negatively impact Bitcoin’s trajectory.
Thielen notes, “If Bitcoin fails to make a sustainable new all-time high, the reason could be a sharp decline in Ether prices.”
Additionally, the demand for Ethereum ETFs is expected to be disappointing, with positioning in Ether futures already stretched.
Market Indicators The Money Flow Indicator, a key metric in the report, indicates that for every 1% appreciation in Bitcoin’s price, $0.8 billion of inflows is necessary.
This means a 10% price increase would require $8 billion in inflows.
The report also states that Bitcoin’s recent 19% rally is strongly linked to $15.4 billion in Bitcoin Spot ETFs, underscoring the importance of sustained institutional investment.
Strategic Moves And Predictions To capitalize on the expected uptrend, the report recommends short-term Bitcoin upside through perpetual futures and selectively investing in Bitcoin miners like Bitfarms (NASDAQ:BITF), Bitdeer (NASDAQ:BTDR), and Marathon Digital (NASDAQ:MARA) for beta exposure.
“Implied volatility is relatively expensive, but we prefer higher beta exposure through leverage,” Thielen suggests.
These insights into Bitcoin’s market dynamics and potential future trends will be further explored at the upcoming Benzinga Future of Digital Assets event on Nov. 19.
Read Next: Why Roaring Kitty ‘Has Already Won,’ According To Crypto Traders
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