Matrixport, a digital asset financial services group born from Bitmain, a leader in Bitcoin mining, projects a bullish breakout for Bitcoin in the upcoming fourth quarter of 2024. In their latest research report titled ‘Matrix on Target: Bullish Prospects for Bitcoin in Q4’, the company gives four reasons to be bullish in the coming weeks.
#1 Narrowing of the trading range indicates a breakout
Matrixport’s analysis starts with a technical assessment of the recent Bitcoin price action. Historically, the third quarter has presented significant challenges, with frequent breakout failures. This year, however, Bitcoin has shown a significantly narrower trading range, a pattern that typically precedes significant price volatility. “The restriction of price movement often foreshadows dynamic price shifts, indicating an impending breakout,” the report notes.
#2 Monetary Policy as a Bitcoin Catalyst
A crucial aspect of the report focuses on the US Federal Reserve’s interest rate policy. Currently, the Fed maintains an interest rate of 5.25%, as opposed to an inflation rate of 3.0%.
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However, recent comments from Fed Chairman Jerome Powell have fueled speculation about a possible rate cut at the September FOMC meeting. “If inflation follows the forecast path, a rate cut at the September meeting is possible,” Powell said.
Matrixport’s analysis correlates these potential rate cuts with greater market liquidity, which historically benefits risky assets like Bitcoin. “Any quarter-point cut by the Fed could inject substantial liquidity into the market, increasing the appeal of non-traditional assets,” the report said.
#3 Impact of the American presidential elections
The upcoming US presidential elections also play a prominent role in Matrixport’s forecasts. The company speculates on the impact of a possible re-election of Donald Trump, pointing to his previous administration’s relatively hands-off approach to crypto regulation. “A Trump re-election could renew the momentum of regulatory reform or laxity, creating a less uncertain landscape for crypto innovations,” the report suggests.
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Trump’s recent appearance at the Bitcoin conference in Nashville, while falling short of some expectations, was largely viewed positively, indicating possible supportive stances on cryptocurrency if he is re-elected. Trump promised to sell the Bitcoin previously seized by the US government and create a “national stockpile” of Bitcoin.
As reported by NewsBTC, this move, if it materializes, could have substantial implications for BTC’s game theory. It could spark a rapid allocation race, with countries printing money to buy as much Bitcoin as possible.
#4 Seasonal Patterns of Bitcoin
The report also looks at the seasonal patterns that influence Bitcoin’s performance, highlighting the typically slow months of August and September. This pattern is attributed to lower trading volumes during the summer holidays and market caution ahead of economic indicators and central bank policy decisions in the fall.
However, Matrixport argues that this year’s unique economic and political context could disrupt these usual trends, setting the stage for an unusual rally.
In short, Matrixport maintains a cautiously optimistic stance on Bitcoin’s performance in the fourth quarter of 2024. “Given the confluence of a narrowing price range, the likely easing of US monetary policy and the potential fallout from the US presidential election, its we’re poised to witness a significant bullish trend. breakthrough in Bitcoin’s price trajectory,” the report concludes.
At the time of writing, BTC was trading at $64,730.
Featured image created with DALL·E, chart from TradingView.com
