This post was originally published on this site
Bitcoin traded in the red for the second consecutive day on August 15, falling -3.42% to $58,942.27 on the BTC to USD charts in the last 24 hours. The drop sent waves across the industry, with other major tokens experiencing significant declines. This comes in the wake of two key inflation reports released over the week and significant BTC-spot ETF outflows, which saw around $81 million pulled out in just a week. Additionally, the transfer of 10,000 BTC, worth $593.5 million, to Coinbase Prime from a major wallet sparked new fears, further pressuring BTC prices.
The interplay of macro-factors on the BTC price
“One of the things that spooked the crypto markets last week was that a large holder moved 30,000 BTC from its custodian at Anchorage over to Coinbase, and people thought there would be a major sell-off,” Brian Estes, CIO of Off the Chain Capital, said in a CNBC interview. “News just broke that 10,000 BTC were sold off, and that’s a major reason it dropped so much.”
Estes notes that volatility is an inherent part of the burgeoning cryptocurrency industry, which has just entered its 15th year. While Bitcoin has gained wider acceptance over the years, the crypto still faces major problems, including fear, uncertainty, and doubt (FUD) about its utility. Estes says the market sentiment is changing, as evidenced by the approval of the BTC spot ETFs earlier this year.
“On the macro level, the mass adoption of Bitcoin isn’t slowing down,” he asserted. “In fact, BTC adoption is growing faster than internet adoption did back in the 1990s. This is an unstoppable megatrend, just like the adoption of cellphones, mobile internet, or washing machines back in the 1950s. The macro trend is strong, and we think it’ll continue for the next 20 years until about 90% of the world has exposure to digital assets, cryptocurrency, and Bitcoin.”
Bitcoin and the Influence of Market Sentiment
As a nascent asset class, cryptocurrency often moves in response to broader economic and market trends. Estes notes that over 50 million people globally own Bitcoin and other digital assets, so a large swathe of investors has a vested interest in market dynamics.
Most notably, the regulatory landscape for cryptocurrency has evolved significantly, with changes in market sentiment influencing Bitcoin’s price movements. Concerns over the regulatory environment and market stability can drive volatility, as seen in the recent dip coinciding with heightened uncertainty in the financial markets. These fluctuations are often linked to the broader context of digital asset adoption and the evolving views of key financial stakeholders.
The stakes are high in the crypto market. Regulatory developments or shifts in market sentiment could dampen Bitcoin’s momentum, while more favorable conditions could open the doors for broader adoption and institutional investment. As the market continues to mature, experts expect that sentiment, news, and shifts in the financial landscape will continue to drive Bitcoin’s price movements.
“It is undeniable that crypto is an increasingly relevant issue,” notes the author of an article on Yahoo! Finance. “And for some, it is the defining issue of our times. Crypto isn’t just an investment opportunity, it’s a movement, a philosophy, and a way of life – and there are true believers.”
While some may argue that this shouldn’t be the defining issue for investors, the author notes, “Crypto exists in the context of all other market dynamics and is currently being affected by broader financial trends. And it’s perfectly natural that people who think about and use crypto every day would elevate it as the most important issue – especially considering that it’s not only a philosophy but an investment.”
Bitcoin Price Outlook for the Rest of the Year
BTC achieved a new milestone when it reached a new all-time high price of $73,000 in March. Estes believes the new BTC all-time high will surpass that mark, with a minimum projection of $500,000 by October 2025 based on Plan B’s S2F model.
Jamie Coutts, a chief crypto analyst at Real Vision, concurs with Estes. On Thursday, Coutts’ X post about a key Bitcoin signal indicating a price breakout for the first time in nearly a year sent excitement across the crypto-sphere, sparking a wide-ranging discussion.
“The central banks are capitulating, the liquidity spigots are opening, and #Bitcoin is about to go much higher,” Coutts said in the Aug. 15 X post. “My composite global liquidity momentum model (MSI) has provided the first Bullish regime signal since Nov. 2023. Over the past month, the BoL and the PBoC have added $400B & $79B, respectively; the broad global money base (credit) has expanded by $1.2T, which has been significantly aided by a sharp decline of the US dollar. Drawing a comparison with similar stages in previous cycles (obviously, it won’t play exactly as it has in the past), in 2017, BTC rallied 19x, and in 2020, 6x. 2-3x is my estimate for 2024.”
Coutts reiterates that this will depend on the performance of the US Dollar Index (DXY) and overall global liquidity. “For BTC to meet this target, the DXY would need to be well below 101, prompted by ongoing central bank injections. This would push global M2 well over $120T this cycle,” he noted.
The Hodl Clarion Call in a Turbulent Market
“Turbulent” doesn’t do Bitcoin, and frankly, the entire cryptocurrency market, justice. And yet, despite significant highs and unnerving lows, Bitcoin has proven once again that volatility is its only constant.
For those who see Bitcoin as more than just a speculative asset, the message is clear: Hodl. If the events of the past year are any indication, Bitcoin’s long-term outlook remains robust. In any case, Bitcoin’s value proposition—decentralization, scarcity, and as a hedge against traditional financial systems—is unmarred by short-term fluctuations.
If crypto is truly the future of finance, then it’s as Anthony Pompliano, founder & CEO of Professional Capital Management, said: “Bitcoin is now the only global payment system that won’t discriminate against anyone regardless of their race, nationality, religion, politics, or actions. This is going to become incredibly important in the coming decades.”
That sounds like a pretty good reason to hold and wait.
Members of the Newport Beach Independent Newspaper (the Indy) were not involved in the creation of this content.
