Bitcoin price is consolidating below $68,000, Standard Chartered predicts a high of $250,000 this cycle

(Kitco News) – The cryptocurrency market is officially in consolidation mode as Bitcoin (BTC) is now trading below $68,000 after rallying last week to a new record high above $73,800, while many high-flying altcoins are seeing double-digit corrections experience.

Data provided by TradingView shows that Bitcoin hit a low of $64,490 on Sunday, down 12.7% from its peak, which is actually a slight decline given the top cryptocurrency's volatile history following new highs.

BTC/USD chart from TradingView

Bulls managed to push BTC back above $68,000 in early trading on Monday, but bears are once again attacking its support line and have sent King Crypto down to $67,480 at the time of writing, a decline of 0, 80% on the 24 hour chart.

Characteristics of an early bull cycle

“Despite the volatility and fluctuating prices, the previous week showed continued strong momentum for BTC spot ETFs, with net inflows recorded across all trading days,” said Matteo Greco, Research Analyst at Fineqia International. “Weekly net inflows exceeded $2.5 billion, with Tuesday alone seeing a net inflow of over $1 billion. Cumulative net inflows since inception are now approximately $12.2 billion.”

“Trading volume for BTC spot ETFs also saw an upward trend, with total trading volume reaching $141.7 billion since its launch, including nearly $28 billion traded in the last week,” he added. “This resulted in a daily trading volume of over $5.5 billion in the previous week, contributing to a higher average daily volume since inception, which currently stands at approximately $3.15 billion.”

While in the past Bitcoin has shown greater volatility following a new record high, often experiencing pullbacks of 20-30%, this time it has shown greater resilience, largely thanks to demand from ETFs, noted Greco.

“These numbers underscore the continued momentum of investment from traditional finance into the digital asset space,” he said. “Despite BTC’s price stability last week, demand comes primarily from ETFs, while domestic digital asset investors are more active on the sell side.”

“This trend is reflected in the decline in BTC held by long-term holders, which are BTC that remained immobile for at least 155 days,” Greco noted. “At the beginning of 2024, this supply was almost 16.3 million BTC and gradually decreased to around 15.1 million BTC currently. This shift reflects traditional investors driving purchasing activity through ETFs, while domestic digital asset investors who accumulated during the downtrend in 2022 and 2023 are now taking profits at a higher rate, reducing the supply of long-term holders. “

He said this behavior is “characteristic of early bull phases in which long-term holders distribute assets to new investors.” If the current market remains in an uptrend and analyzing past cycles, this pattern could persist until long-term holders supply supply out of demand of new investors, which usually coincides with the peak of the cycle and the beginning of a downtrend phase.”

Greco noted that the next Bitcoin halving is “about a month away,” saying that historically the cycle has peaked “between 6 and 12 months later.” If historical patterns repeat themselves, the peak of the current cycle could occur in late 2024 or the first half of 2025.”

Standard Chartered raises its estimate for the peak of the cycle

Given the historical demand and trading volume for spot Bitcoin ETFs, Standard Chartered has raised its year-end forecast for Bitcoin from $100,000 to $150,000 and believes the cycle could peak at $250,000.

The company determined these price targets by comparing Bitcoin's performance to gold prices following the launch of gold ETFs in the US and correlating ETF inflows with BTC price.

“We believe the gold analogy – both in terms of ETF implications and optimal portfolio mix – remains a good starting point for estimating the 'right' BTC price level over the medium term,” Standard Chartered analysts said in a note to clients investment announcement sent Monday. “If ETF inflows reach our median estimate of $75 billion and/or if reserve managers buy BTC, we see a good chance of breaking $250,000 sometime in 2025.”

Once the final peak is reached, analysts expect Bitcoin price to settle around $200,000.

They also said there is a good chance the Securities and Exchange Commission (SEC) could approve the first spot Ether ETFs on May 23, leading to inflows of up to $45 billion in the first 12 months and would drive the ETH price to $8,000 by the end of 2024.

“In 2025, we expect the ETH-to-BTC price ratio to rebound to the 7 percent level that prevailed for much of 2021-22,” the analysts said in a separate note. “Given our estimated BTC price level of $200,000 at the end of 2025, that would mean an ETH price of $14,000.”

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