Policy Developments Signal An End to Price Corrections
Since the end of March, popular cryptocurrencies such as Bitcoin, Ethereum, and Solana have entered a correction phase. Bitcoin, which had previously reached a peak of $73,000, saw its price drop to a low of around $57,000 during this correction period. This phase of price adjustment has raised a pertinent question among investors and analysts: When will Bitcoin's price correction end?
From a policy perspective, there has been a significant development that may provide some clues. On May 23, 2024, the U.S. Securities and Exchange Commission (SEC) approved the Ethereum spot Exchange-Traded Fund (ETF). This move is a clear policy signal indicating a major shift in the U.S. government's stance towards altcoins. The approval of the Ethereum spot ETF suggests a more favorable regulatory environment for cryptocurrencies, and it opens the door to the possibility of a Solana spot ETF in the future. Such regulatory endorsements can significantly influence market sentiment and investor confidence, potentially setting the stage for the next phase of price increases for these digital assets.
Capital Inflow and Market Liquidity Are Expected in July
While the current policy landscape has created a foundation for the potential rise of Bitcoin price, Ethereum price, and Solana price, the critical factor now is market liquidity. No matter how favorable the news, if market liquidity remains insufficient, significant price surges will be hard to achieve. Traditionally, the market's observation of U.S. liquidity release has been through indicators such as U.S. bonds, the U.S. Treasury General Account (TGA), interest rates, and exchange rates. However, the current methods of liquidity release by the United States are more opaque, making it challenging to discern clear patterns from any single indicator.
Considering a broader set of factors, it appears that the United States might begin releasing liquidity in July 2024. This anticipated liquidity release could start impacting the market in advance, potentially as early as June. As a result, the cryptocurrency market could begin to experience a new upward momentum in June, with Bitcoin likely to lead this surge.
In the short term, Bitcoin faces a resistance level around $74,000. If BTC manages to break through this resistance, it could potentially double in price in a relatively short period. Following Bitcoin's lead, Ethereum and Solana are also expected to experience substantial gains.
Conclusion
The trajectory of Bitcoin and Ethereum prices in the second half of 2024 hinges on a combination of policy developments and market liquidity. The recent approval of the Ethereum spot ETF by the U.S. SEC marks a significant regulatory milestone that could positively influence investor sentiment and market dynamics. Additionally, the anticipated liquidity release by the U.S. government, possibly starting in July and impacting markets from June onwards, could provide the necessary capital flow to fuel a new round of price surges.
As these factors align, Bitcoin is poised to lead the charge, with a potential short-term resistance breakthrough at $74,000 setting the stage for a rapid price increase. Ethereum and Solana are also likely to benefit from this momentum, riding the wave of renewed investor interest and market optimism. Investors should closely monitor policy signals and liquidity trends to gauge the timing and extent of the expected market rise, positioning themselves to capitalize on the next bullish phase in the cryptocurrency market.
Disclaimer:
The above content does not constitute any investment advice. Investing in cryptocurrencies is risky, and carries higher risks, possibly resulting in the loss of the entire capital. Investors should conduct their own research (DYOR). BingX is not responsible for any losses incurred from purchasing tokens.
