Experts weigh Bitcoin’s chances of rising to $40,000

In the near term, Bitcoin, which had previously tested the $35,000 level, will continue its upward movement amid rising trading volumes and capital inflows into cryptocurrency funds. This was the view of experts surveyed by ForkLog.

Positive news and dominance

According to Nikita Zuborev, an analyst at the BestChange aggregator, the local trend began against a backdrop of moderately positive news — the U.S. Securities and Exchange Commission’s decision not to pursue the case against Ripple executives, and also a U.S. appeals court ruling to reconsider Grayscale’s application to convert its cryptocurrency trust into a spot Bitcoin ETF.

An additional push to the rally was triggered by a chain of liquidations of margin positions.

“Overall, nothing threatens Bitcoin enough to change the direction of the local trend in the coming weeks. This week, in the absence of new positive news, we will see a period of consolidation around the $34,000–$35,000 levels. If new positive press releases are issued, a continuation of the rally up to $40,000 is possible,” Zuborov says.

The Bitcoin dominance index rose above 52% — a record in the last 2.5 years. Drawing on historical data, the analyst called the current situation the start of a modest market upturn driven by capital inflows into the first cryptocurrency.

“Approximately, this phase will last for another six months or so, after which, with the halving approaching, the rally everyone has been waiting for will begin. A further six months later will begin a redistribution phase — when funds move en masse from Bitcoin into altcoins, provoking price gains across the entire market,” he says.

Zuborev expects this trend to persist at least until the end of 2024.

Not a rally, but a revival

According to Anton Toropets, regional director of the CommEX exchange in Russia and the CIS, a good sign that the market is transitioning to a bullish phase is that negative news has ceased to significantly influence it.

He pointed to a notable pump in some altcoins, for example MINA (daily gain around 88%, according to CoinGecko).

Toropets also holds cautious assessments of Bitcoin’s movement and does not expect a breakout above $38,000 in the coming days.

“It’s still early to talk about the start of a rally, but this is definitely a healthy revival of the market. I would expect further increases in volatility and trading volumes. At the same time, based on previous cycles, room for a correction remains,” he adds.

The move isn’t over

Fuel for Bitcoin’s current ascent has been short positions and stop-losses, as well as liquidity inflows from China and nearly $2 billion in minted stablecoins, says trader Vladimir Koen. But the main driver remains the expectation of Bitcoin ETF approval.

“Market sentiment after the fake news of the spot Bitcoin ETF approval by BlackRock turned negative, which led to a rise in short volume. And although the stock market began to correct, Bitcoin continued to rise, restoring its correlation with gold. That was a sign of the asset’s strength,” he noted.

According to him, in three days Binance saw nearly $2.7 billion in USDT flow in. There were no significant sell-offs at the $30,000 level, although breaking through the sell walls above $30,200 was not easy. The $32,000–$35,000 range was cleared in about 15 minutes through liquidations and stops.

“The move isn’t over yet. The next resistance level is $36,000–$37,500,” the trader said.

Koen also urged targeting purchases by large investors. For example, such buying occurred in July soon after BlackRock CEO Larry Fink’s statement about digital gold’s ability to resist inflation alongside precious metals.

Additionally, in its own filings BlackRock referenced selling a presid-investor пакета акций iShares Bitcoin Trust. Under this package, they were to purchase Bitcoin on the market, Koen explains.

Self-fulfilling prophecy

Allbridge.io co-founder Andrey Velikiy reminded of the simplest way to analyse what’s happening in the market: when a cryptocurrency is bought, it rises; when it is sold, it falls.

“The thing is that at certain times the market is more inclined to one trend than another. Right now, the so-called Uptober; the very expectation of a rise in October can become a self-fulfilling prophecy, especially if market makers back it,” he said.

Among the objective growth factors he included are expectations of institutional capital inflows following Bitcoin ETF approval, global instability and wars, and the planned 2024 halving.

Discussing altcoins, Velikiy reminded that they tend to “shoot up” after strong moves in the first cryptocurrency. Therefore, he expects high activity in several of them in the coming days:

“I am perplexed by the lack of new narratives in the market. If in the last bull market we had the concept of decentralized finance, when during DeFi Summer everything that at least theoretically related to it rose, now we see roughly the same projects as a year or two ago.”

The expert is not quick to call the current situation a rally, because “single price surges are not equal to sustainable growth.”

“I would like to believe that our long-suffering market is beginning to recover after all the shocks of recent years, but I remain skeptical for now. I will be glad if I am wrong,” he concluded.

As of writing, Bitcoin is trading at around $34,495, according to CoinGecko.

Earlier, Glassnode analysts, based on estimates of capital movements between hodlers and speculators, concluded that Bitcoin’s current market structure resembles the phase of recovery after bear-dominated periods in 2016 and 2019.