What will happen to Bitcoin by the end of the year?

Thesis: bullish

December is approaching, the final month of a year that has been bullish for Bitcoin (BTC). And everything indicates that the upward movement will continue from now until the end of the year.

The main driver for the price of the digital currency is the Expectation that exists prior to the impending approval of a Bitcoin ETF Cash in the United States. The time that the US Securities and Exchange Commission (SEC) has to make a decision on this matter is running out.

The regulator will have a deadline of early 2024 to make a decision, and most analysts expect the final ruling to be announced no later than January. Most also assume that this verdict will be positive.

With this in mind, and knowing that an ETF will be a catalyst that will accelerate Bitcoin’s bullish momentum, Major investors are piling up.

The following graphic, published today from CoinShares, shows week-over-week inflows into cryptocurrency-backed investment products (mainly Bitcoin). These products are used in particular by institutional investors who want to participate in the price of the asset via a regulated instrument. In the last week These funds have achieved the highest returns so far in 2023.

CoinShares says:

Last week, digital asset investment products saw inflows totaling $346 million. This increase, driven by anticipation of the launch of a US spot ETF, is the largest since the late 2021 bull market. The combination of price increases and capital inflows has increased total assets under management (AuM) to $45.3 billion, the highest level in more than a year and a half.

CoinShares, American investment company.

It is obvious that the Large investors do not want to be excluded from a possible revaluation of Bitcoin in the coming months. And these institutional purchases will ultimately impact the price of BTC directly or indirectly due to the simple law of supply and demand.

Therefore, The next five weeks are expected to be predominantly bullish for Bitcoin. Even if there were negative macroeconomic events, the anticipation of a Bitcoin ETF approval would be higher and would push the market to continue its accumulation trend.

How high could Bitcoin rise in December?

Attempting to answer the question in this subheading enters the realm of speculation, as it is impossible to know for sure. However, there are those who dare to make predictions.

The investment company MatrixPort, for example, has been insisting on this for several months Bitcoin will end the year at around $45,000as CriptoNoticias reported:

“Based on our historical analysis, the Bitcoin bull market is expected to continue. “Bitcoin tends to be a strong trending asset as high prices attract more traders to join the price movement.”

MatrixPort, investment company.

MatrixPort has dubbed this rally the “Bitcoin Christmas Rally” or “Santa Claus Rally.”

When the theory of supports and resistances is taken into account in trading, it can be seen in the chart below. TradingView, that Bitcoin would find its first resistance in the $40,000 area (blue line). If it continues its uptrend, it could face $45,000 (red line).

In any case, it is important to note that the price movement of a financial asset – such as Bitcoin – is usually not linear. Although the forecast trend for December is bullish, there could be a downward correction. The trader, who identifies himself on social networks as SantinoCripto, wrote:

“We are still in the bullish channel, the lower part of the channel is at $36,000 and the upper part is at $40,000, so trading in a range between these two levels is interesting in the current days.” It is important not to lose the 36,000 Bitcoins. If we lose it, we would potentially go to the main support, which is in the $34,000 or $33,500 area.

SantinoCripto, trader.

SantinoCripto adds that he believes there is a high probability of a return to these lower levels if there is no news on Bitcoin spot ETFs in the United States in the next two weeks. This, he says, would serve to “refresh the indicators, look for liquidity pools and liquidate.” longs over-indebted.

Trader Michaël van de Poppe carries out and adds a similar analysis to SantinoCripto The potential declines in Bitcoin are a good opportunity to buy more. “Buying when prices fall is the right way to go” holds.

As can be seen, the outlook is optimistic, although there are elements that urge caution. This is as long as we consider a short-term investment perspective.

However, for those who have a medium or long-term investment horizon, 2024 and 2025 (with the halving in between) these will be bullish years if history repeats itself. Investment strategies such as DCA can be helpful in determining the purchase price. And according to major institutional investors, this could be a good time to fill the Bitcoin “bags.”

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clarification: This text is for informational purposes and does not constitute financial advice. Each investor should conduct their own research.