Happy New Years Bitcoin!

Introduction to Bitcoin in 2024

• Bitcoin started the year at around $42,000 and is currently at $93,000, a 120% increase.
• This is the second strong year for Bitcoin, following a 155% increase in 2023.

Comparison to Previous Years

• The year-to-date ROI for Bitcoin in 2024 is similar to 2023, with some divergences.
• Comparisons to 2020, 2016, and 2012 also show similarities in the market trends.

Market Analysis

• Bitcoin is currently above its bull market support band, with the 20-week estimate still high.
• The price is about 20-21% above the bull market support band, similar to the same time last year.
• Bitcoin dominance is at 58% and has been increasing over the past three years.

Factors Affecting the Market

• The Federal Reserve's monetary policy plays a big role in the market, with quantitative easing (QE) and quantitative tightening (QT) affecting Bitcoin's price.
• The dollar's value is also highly correlated with the long end of the yield curve, which can impact Bitcoin's price.

Predictions for 2025

• There is a possibility that Bitcoin dominance may drop in 2025, following a pattern of three years of increase followed by a year of decrease.
• The market may see a rally in altcoins, but it's unclear when this will happen.
• The bond market may be indicating that the Fed has cut too soon, leading to an increase in the long end of the yield curve.

Risk Assets and Correlations

• Bitcoin is highly correlated with other risk assets, such as the S&P 500 and Tesla.
• The 10-year yield has been increasing, which can be a drag on risk assets.
• The two-week RSI shows diminishing peaks and lower lows, indicating a potential correction.

Conclusion

• The market is uncertain, with various factors affecting Bitcoin's price.
• It's possible that Bitcoin may experience a correction, but it's unclear when or how deep it will be.
• The optimist views the current drop as a front-running of the correction, while the pessimist sees it as a sign of further weakness.