5 Factors to Launch the Next Bitcoin (BTC) Bull Run

After reaching a record price of $67,600 on November 9, 2021, Bitcoin entered a strong downtrend for two and a half months, falling as low as $35,200 on January 23. BTC, which reacted from this level and rose again to $47,500 on March 30, continued the bear season with two major collapses on May 6 and June 10 with the combination of many successive factors.

The world's highest inflation in 40 years, the fuel crisis, the logistics crisis, the huge increase in energy prices that also affected BTC mining, the Russia-Ukraine war, countries' monetary policies, recession and many other factors, Bitcoin will one day start its bull run again. In this article, we'll talk about the 5 factors that will start a new Bitcoin bull run.

Stagnation of the Impact of FED Interest Rate Decisions

After inflation started to show itself in the world, the US Federal Reserve Bank signaled that it might raise interest rates 5 or 6 times in a row. With 25 basis points in March, 50 basis points in May, and 75 basis points in June and July, the US policy rate rose to 2.25%. While the FED is expected to raise interest rates between 50 and 75 basis points at the meeting in September, the fact that this is known may change the BTC price quickly for an hour when the interest rate hike is announced, but it will bring the price back to its previous level. A 25 basis point hike would be bullish and a 100 basis point hike would be bearish. In any case, the moment inflation shows clear downward trends and the interest rate starts to be gradually cut, it will be a cornerstone for Bitcoin to start a new bull run.

Bitcoin Halving

Bitcoin halving is a protocol developed by Satoshi Nakamoto to ensure that Bitcoin remains a deflationary currency, a store of value and continues to increase in value for years to come. Every four years, a halving takes place. This means that Bitcoin miners' block rewards are halved. There is usually a ceiling price at some point between day 350 and day 500, followed by a bottom price between day 750 and day 1000. The good news is that it's been about 850 days since the 2020 halving. While there is no rule that a single data point will always repeat itself, we may have seen the bottom in BTC price or will see it in 250 days. Since price movements after the bottom will be upward, the approach of the halving means the start of a bull run.

Diminishing Hopes of Small Investors

In its relatively short history, Bitcoin has repeatedly bottomed out and repeatedly risen to record prices. The end of a bear season usually comes after a very large number of small investors have already lost their investments and moved on to other areas. The small and short-term investor is often impatient and aims to multiply their investment in just a few days or weeks. However, like any other investment instrument, cryptocurrencies often delight long-term investors. When small investors lose patience, lose hope that the market will rise again, and lose faith in the blockchain world, it is a sign that the market has reached the bottom and a bull run with new participants can begin.

End of the War & Reduced Tensions between Great Powers

The war between Russia and Ukraine, which started in February 2022, is still ongoing. As a result of the war, which is sometimes fierce in the squares and often on the table, many countries around the world, especially NATO countries, have imposed restrictions against Russia. This was followed by crises in oil, natural gas, grain and many other products imported from Russia. Following this war, tensions between China and Taiwan, the resignation of Boris Johnson in the UK government, and global financial factors have negatively affected all world markets and exchanges, including cryptocurrencies. When tensions ease between major governments and steps are taken to achieve a ceasefire in the war, many obstacles are removed for the new bull rally for cryptocurrencies to begin.

Large Investors' Confidence in Money Markets

We've talked about small investors fleeing the crypto market, but an equally important factor is that large investors are gaining confidence in the money markets. Inflation in the US is 8.50%, in the Eurozone it is 9.10%. These two levels are the highest in 40 years. The US economy has contracted for two consecutive quarters, raising fears of a recession, or financial stagnation. The IMF is lowering its forecast for US and global economic growth in 2022 and 2023 with each report. An interest rate hike, a buoyant economy and the easing of the tensions mentioned in the article above will prevent recession fears and lead to a downward trend in inflation. Tesla, one of Bitcoin's largest institutional investors, announced in its second fiscal quarter report that it sold $936 million worth of BTC. MicroStrategy, Galaxy Digital Holdings, Voyager Digital LTD, Tesla (still holding 25% of its investments), Marathon Digital Holdings and many other large institutions have Bitcoin investments. New cryptocurrency investments from these and other institutions will also mobilize other investors who are undecided about the market.

Conclusion

Historically, the things that cause the price of Bitcoin to rise and fall are more or less clear. In particular, periods of government interest rate hikes and Bitcoin halvings cause clear shifts in the price of Bitcoin, as they follow patterns determined by the law of supply and demand Bitcoin has been a good store of value since its launch. We can say that Bitcoin, which is called digital gold and has the advantage of limited supply compared to gold, is very close to its bottom.. Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!