Nansen outlines conditions for Bitcoin’s bull rally

For a renewed bull market in Bitcoin, regulatory clarity in the United States and a sustained decline in underlying inflation are required. That was the conclusion reached by analytics firm Nansen.

Read @Aurelie64475602‘s latest macro update on resilient growth and stubborn inflationhttps://t.co/k4HE1njKGu

— Nansen ? (@nansen_ai) June 20, 2023

Aurelie Barter, a researcher, noted in the report that central bank narratives and market narratives are changing: the recession scenario is pushed back, and the foreground is taken by ‘sticky’ inflation.

“This creates nonlinear effects, as monetary policy (outside Asia) remains more restrictive and, in turn, becomes a growing constraint on risk assets,” she wrote.

At the same time, shallow pullbacks in Bitcoin and lower implied volatility of cryptocurrencies suggest that many regulatory and macroeconomic negatives are already priced in, the analyst said.

On June 10, the price of digital gold fell below the $26,000 level. This followed the filing of lawsuits by the SEC against leading Bitcoin exchanges Binance and Coinbase. The price began to recover after the federal funds rate target range was kept by the Federal Reserve.

On June 21, Bitcoin briefly rose above $29,000. It had tested this level in late March. In CNBC’s poll in the same month, influential industry players demonstrated bullish sentiment, up to Bitcoin reaching $100,000 by year-end.

Earlier, MicroStrategy founder Michael Saylor forecast a multi-fold rise in Bitcoin thanks to regulation. In his view, the actions of the SEC lay the groundwork for the next bull phase.