As cryptocurrency prices begin to recover from the long period of consolidation and retracement observed in the second and third quarters of the year, the market is entering a phase of renewed optimism.
This change was significantly influenced by Donald Trump’s recent victory over Democrat Kamala Harris, which coincided Bitcoin (BTC) recording recent all-time highs for five consecutive days since the election.
Major Bull Run for cryptocurrencies is ahead of us
Crypto analyst Miles Deutscher provided an overview of his situation on the social media platform X (formerly Twitter). ten key factors which he believes are paving the way for the most significant bull market in the cryptocurrency market in years.
Deutscher emphasizes that Trump’s victory represents a pivotal moment, ending what he calls the “operational chokepoint” that previously choked the growth of the crypto sector through restrictive policies.
Analyst says with Republicans’ majority in Congress, the likelihood of tough regulatory measures appears reduced, opening the door to clearer, pro-crypto measures statutewhich could push cryptocurrency prices even higher in 2025.
Deutscher also points to several macroeconomic elements that contribute to this bullish sentiment. It notes that the Federal Reserve (Fed) is expected to continue cutting interest rates through the first half of 2025.
Such monetary easing typically encourages investors to seek out riskier assets, making cryptocurrencies an attractive option. Moreover, international interest rate cuts are expected to further stimulate momentum global liquidity and risky assets.
The analyst predicts a parabolic augment in Bitcoin
The current liquidity dynamics in the cryptocurrency market also paint a positive picture. Deutscher points out that Bitcoin functions like a “liquidity sponge”, absorbing capital affecting the market.
The analyst says that with demand for BTC reaching unprecedented levels and supply dwindling, conditions seem ripe for a significant price augment.
The supply and demand dynamics for Bitcoin are particularly favorable at this time. Demand is at an all-time high, as evidenced by significant inflows into Bitcoin spots listed funds (ETF).
Wealth managers are increasingly recommending exposure to digital assets to clients in the conventional finance industry, which increases the attractiveness of the assets. On the supply side, Bitcoin balances on exchanges have reached historic lows, contributing to a scarcity that often causes prices to rise.
Additionally, this year’s Halving event in April, which reduced the rate of issuance of recent Bitcoins, further tightened supply.
As Deutscher summarizes, the convergence of these factors suggests an explosive advantage in the cryptocurrency market. In his opinion, the market has entered the third phase of the current trend running of the bullhistorically characterized by parabolic growth.
Given the unique set of circumstances occurring simultaneously – political changes, macroeconomic support, and favorable supply and demand conditions – the next six months could be transformative for the cryptocurrency landscape.
Featured image from DALL-E, chart from TradingView.com
