Market momentum appears strong, driven by Trump’s victory, solid corporate earnings, and rising consumer sentiment, according to some analysts. Bitcoin and the broader crypto market are continuing their upward trajectory, with total market capitalization fast approaching $3 trillion.
Factors Contributing to the Rally
- President-elect Donald Trump’s victory in the 2024 election has added optimism that his party will meet little resistance in passing crypto-friendly legislation. Trump made several promises to crypto advocates on the campaign trail, including establishing a Bitcoin reserve, protecting mining interests, and forming a crypto council.
- Solid corporate earnings among broader equities and heightened consumer sentiment are also contributing tailwinds. The investment timeframe through early 2025 looks positive for crypto, according to analysts.
Sustainability of the Rally
- While the rally is just beginning, analysts say every past cycle has ended at some point. Geopolitical risks, ballooning US debt, and potential climate disasters could ruin the party.
- The markets could lose steam by Q1 2025, with a moderate correction followed by more gains later in the year. Key indicators to watch that could deter investments include the MOVE Index, 10-year Treasury yields, and the dollar index strength.
Price Targets
- A $100,000 Bitcoin price tag by year-end 2024 is “very much in play,” according to one analyst. Continued ETF inflows, FTX cash distributions, and a crypto-friendly SEC are expected to support prices.
- Analysts see a 1-year or more window for crypto prices to potentially run higher. Risks emerge if certain bond and dollar strength markers are breached.
- Despite the recent pullback the crypto market has experienced over the last 24 hours, analysts and trader alike believe this is just a small bump in the road on the way to higher highs
- Q4 is traditionally the best-performing time for crypto, especially in an election year where the candidate is favorable. $90,000 is a massive physiological level that price needs to flip to see higher highs.
Conclusion
Crypto’s surge to near all-time highs is showing impressive momentum, but analysts urge some caution. While tailwinds appear strong for now, the sustainability of the rally remains uncertain, and markets could lose steam at some point in 2025. Investors should watch key indicators that could foreshadow a correction.
