Bitcoin’s popularity increased considerably in the past years, gaining media coverage and making history as a practical digital coin. The Bitcoin price was also affected by these factors, considering the demand for the asset increased. However, as the supply is limited, with a maximum of 21-million-coin limit, the volatility levels are making it difficult for the coin to be mined, which leads to challenges in maintaining the ledger of transactions.
With these fluctuations in price and security, Bitcoin is going through hardships. Yet, experts are forecasting a bull market in the near future. The latest price surges and downfalls might indicate that Bitcoin will have a good time in the second part of the year.
Let’s see the determining factors that might contribute to a Bitcoin bullish trend.
First of all, what is a bull market?
A bull market is one of the most favorable moments in crypto markets. Usually followed by crypto winters and periods of significant difficulties for investors, the bullish trends indicate positive investor sentiments and market rise, sustained by a strong economic environment.
This phenomenon is also known as a bull run when a price increase of at least 40% maintains over one or two days. The bull market continues as long as there’s more supply than demand. After that, the market slowly shifts to a bear market, and prices go down.
The main cause of a bull market is investors’ behavior. When they notice that prices tend to increase, they will start buying stocks at a lower price and hope for a consistent return on investment. This practice usually triggers the continuity of stock prices to rise. Other factors leading to bullish markets include increased GDP and low unemployment rates. These factors can also be considered important in traditional markets, but others are specific to the crypto market.
For example, crypto price trends are linked with mainstream and pop culture support, the introduction of institutional capital and the growing optimism from traditional finance. At the same time, when world events threaten traditional finance, such as Covid-19, people shift their focus to cryptocurrencies to deal with economic uncertainties.
Investing in a bullish market must be done cautiously because investors need to start early to acquire sustainable profit. It’s common to begin buying during bearish markets at lower prices and then sell during bull runs. Still, in case of a sudden bull market, the best thing to do is reduce positions and move holdings to assets with more value, such as cash or precious metals.
Some characteristics of a crypto bull market include the overpricing of certain products due to
increased prices, strong demand in discordance to the lack of supply and the general interest in cryptocurrencies from celebrities and famous people, driving investor confidence in the market. However, a tricky aspect of the bullish trend is the sudden price drop in case of negative news and events, which may confuse investors in not taking the right strategy.
How the next Bitcoin halving might prepare the ground for bull markets
Bitcoin halvings happen around every four years when the network mines 210,000 blocks. This formality reduces the rate at which new coins are released into circulation. It is expected that halving will occur until 2140 when Bitcoin it’s supposed to reach its coin limit. After that, miners will be rewarded with fees for processing transactions.
The next halving will occur in April 2024, and investors are excited about it because, in the preceding halving, the Bitcoin prices went up the roof. Experts anticipate that Bitcoin will reach new highs in the next 18 to 24 months.
Bitcoin’s BlackRock ETF showcases a possible price rally before the halving
BlackRock, a multi-national investment company, released statements on spotting Bitcoin ETFs to push into crypto, which increased investors’ optimism on the cryptocurrency’s future. By allowing more investors to get exposure to the asset, the company’s actions have significantly impacted the crypto market, increasing trust.
Corporations are trying to build trust in cryptocurrencies, especially Bitcoin, which has been the subject of worldwide adoption for some time. While only two countries made it legal tender, various countries use the asset worldwide to fight off the lack of support from official banks.
The rise of Bitcoin’s market dominance might also be a sign
Recent news states that Bitcoin reached 50% market dominance for the first time in a while, driving more investors towards Bitcoin investments. This is pretty impressive, considering the FTX crisis and regulatory scrutiny. Compared to Ethereum, whose market dominance maintained constant values, Bitcoin is ruling the crypto market again by being the most used cryptocurrency and asset.
However, the increased interest in Bitcoin was also triggered by how negatively impacted altcoins were by the latest SEC crackdowns, despite altcoins’ efficiency and security compared to Bitcoin, their value and trust are shaking under economic pressure.
Finally, bull patterns have been noticed
After recent technical analyzes, it was discovered that bull flag patterns appeared, leading investors to think that a bullish trend should occur. This element resembles a flag on a flagpole and is followed by a period when the price remains at a particular value. This steep vertical rise in price is a clear sign that continuation patterns will happen soon, which is a sign for investors
Before the actual bullish market occurs, it’s best for traders to buy crypto as long as the prices are low so that when prices surge considerably, which will be the case after this bullish period, they’ll make more significant profits than usual. But there’s also the possibility to buy during the bull market to contribute to the uptrend and help the whole community.
As the consequence of the latest crypto winter left every investor with no hopes, little signs arise and increase positive investor sentiments by expecting a bull market in the second part of 2023. Some of these factors include the next 2024 halving, corporations boosting Bitcoin and the cryptocurrency’s increase in market dominance.