Charted: Bitcoin price rallies as crypto analysts eye ‘historical highs’

Bitcoin is just a few thousand dollars away from hitting an all-time high, following a remarkable rally that has seen the cryptocurrency increase in price by nearly a third since last month.

The world’s most valuable cryptocurrency was trading above $68,000 on Wednesday, recovering from a dip below $53,000 in September during a panic-induced sell-off. A modest price surge of less than 10 per cent from here could push bitcoin past its previous record high of $73,700 set in March of this year.

Bitcoin’s surge towards an all-time high is reminiscent of past bull markets, such as the late 2017 rally when the cryptocurrency first crossed the $20,000 mark. Unlike the retail-driven frenzy of 2017, however, the current rally is fueled by institutional adoption resulting from the first ever spot bitcoin exchange-traded funds (ETFs), which launched earlier this year to bring greater legitimacy and stability to the market.

More than $550 million of net inflows via spot bitcoin ETFs were recorded by ETF tracker Farside on Monday, marking the largest daily inflow since June and signalling a resurgence in investor demand.

This institutional interest in bitcoin has also helped push its dominance over the rest of the crypto space to a 3.5-year high. Figures from crypto market tracker CoinMarketCap show bitcoin now makes up more than 57 per cent of the $2.32 trillion market – up from around 50 per cent at the start of the year.

Several other factors have also been credited for the latest price rally, including heightened attention on the crypto space due to the US presidential elections. Both leading candidates have courted the industry, with Donald Trump proposing several crypto-friendly policies – and even launching his own token – and Kamala Harris hinting that she will be more favourable than then current administration.

Some analysts have also pointed to anticipation surrounding new stimulus measures in China as another potential cause of the price surge.

“The potential first target of the new bull rally looks to be the area of historical highs as it approaches $74,000, with a more distant target of $80,000 by the end of the year,” Alex Kuptsikevich, a senior market analyst at FxPro, told The Independent.

“Bitcoin’s growth is being fuelled by expectations of new stimulus measures in China. Over the weekend, Chinese Finance Minister Lan Fo’an said that the country will soon introduce a package of additional fiscal measures to support economic development.”

Bitcoin’s recent price increase has taken its overall market cap above $1.3 trillion, ranking it among the top 10 most valuable assets in the world – just behind Facebook-owner Meta.

Bitcoin is up more than 300 per cent over the last two years, following a quadrennial pattern that many analysts have tied to the cryptocurrency’s halving cycle. This relates to an event hard-wired into bitcoin’s design, which sees the rewards for mining bitcoin slashed in half every four years.

Historically, the sudden drop in supply has preceded record-breaking price rallies, with the latest halving event taking place in May this year.

Another, less scientific, price trend that could be contributing to the latest price rally is something referred to by crypto market analysts and traders as “Uptober”.

Over the last decade, October has been bitcoin’s best performing month. Gains range from 5 per cent to more than 60 per cent, with this month fitting somewhere in the middle of that range. Only the bear markets of 2014 and 2018 saw bitcoin’s price drop in October of those years.

While some analysts appear confident that bitcoin can continue on its positive trajectory, others warn that uncertainty surrounding major geopolitical events could contribute to a turbulent end to 2024. The unknown outcome of the US elections, plus the escalation or deescalation of geopolitical conflicts could see bitcoin’s price lurch in either direction, according to Ryan Lee, a chief analyst at the crypto firm Bitget Research.

“By the end of the month, volatility in the crypto market will likely increase ahead of key events – the next US Federal Reserve meeting on the key rate in early November and the US presidential elections at the same time. BTC price fluctuations may range from $58,000 to $69,000,” Mr Lee said.

“On a technical pattern, indicators like a ‘golden cross’ – where the short-term moving average crosses above the long-term moving average – may signal a bullish trend. If this pattern continues, accompanied by a spike in trading volumes, we can see bitcoin reaching or even exceeding the $70,000 mark.”

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