Catalyst needed to send crypto market up or down

Table of Contents

• The negatives 
• The positives
•  
• Catalyst needed
• Longer term view

There seems to be as many positives as negatives for the crypto market. With the market currently vaguely bullish, but generally trending sideways, perhaps a catalyst is needed to launch the market in one particular direction.

There are a few things that need to be taken into account when assessing whether bitcoin and the rest of the crypto market are going to continue on up, or whether the entire crypto market is going to sink down to a much deeper correction.

The negatives 

If analysts at JP Morgan are to be believed, the Spot Bitcoin ETF launches were a failure. You then ally this information with analyst Jim Cramer, who commented “Nobody showed up”, and also economist, and long time Bitcoin critic Peter Schiff, who termed the launches as “another disaster”. In the same vein, you could quote Arthur Hayes, ex CEO of BitMEX, who says that crypto is “going much lower”.

In addition, many commentators are pointing to the continued pressure from the Grayscale ETF selling, which they perceive will mean that bitcoin will not be ready to rally until late 2024 and even into 2025.

The positives

Looking at the other side of the coin, a much more positive slant can be applied to the bitcoin price, and by extension that of the majority of the altcoins. 

For the Spot Bitcoin ETF launches, it must be noted that if Grayscale is excluded, the rest of the ETFs saw an influx of $5 billion, which means that there is an overall positive inflow. Add to this that the selling of the Grayscale ETF is now slowing dramatically, and the FTX part of this has now finished, and you have a much more positive outlook on this particular front.

Finally, there are 80 more days until the halving, and $BTC is now at $42,500, up from $38,500 in only a week. Both sides of the coin have their say on the matter, but one might perhaps come down on the side of the positive aspects. The positives and negatives were taken from this tweet on X by Fred Krueger (@dotkrueger).

What I am hearing: (A)

- "ETF launch is a failure" -- JP Morgan
- "Nobody Showed up" -- Cramer
- "Another Disaster" -- Peter Schiff
- "Going much lower" -- Crypto Hayes
- "Months left of Grayscale selling" -- Everybody
- "Won't rally until late 2024 / 2025" -- lots of people.
-…

— Fred Krueger (@dotkrueger) January 28, 2024

Catalyst needed

For the shorter term, something is needed that will jolt the market. None of the factors above are having much effect on the market currently. Therefore, it would be good to see something positive or negative hit the market. If it’s positive, bitcoin can perhaps look at taking out the yearly high, and if it’s negative, traders and investors can have the chance to get much better entries - it’s a win-win.

Longer term view

All this said, going into the longer term view of the rest of this year, many of the points just mentioned will probably not have such a major impact. Institutions will probably continue to dip their toes into bitcoin via the Spot Bitcoin ETFs, especially given that recession is arguably on the horizon, and bitcoin would be an attractive addition to portfolios.

In addition, bitcoin is just getting into its bull market run, and in spite of the odd two or three corrections that will potentially come, the price is still likely to climb. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.