12.04.202411:10 Forex Analysis & Reviews: Bitcoin will thrive during supply crisis

What will happen with Bitcoin? The answer to this question depends on whether you have this cryptocurrency in your wallet or not. According to a survey of 3,600 consumers conducted by Deutsche Bank, by the end of this year, BTC/USD quotes will fall below 20,000, which is approximately 50,000 lower than the market price. 38% of respondents even believe that the token will disappear over time. Only 10% see its growth above 75,000 by the end of December, however, 40% believe Bitcoin will thrive.

On the contrary, cryptocurrency holders are making mind-blowing forecasts. $100,000 is not a figure worth striving for. Another matter is $1 million. Considering that after the halving on April 20th, the daily production of tokens by all miners will decrease from 900 to 450, a supply crisis is evident. Especially since 45% of previously issued digital coins have not moved from their wallets for 3 years, and 70%—within a year.

Consumer Survey Results on the Future of Bitcoin

On the other hand, demand for Bitcoin is doing fine. The spot ETFs launched on January 11th attracted $12 billion on a net basis. And even though interest in specialized funds has somewhat diminished in spring, it doesn't mean it won't pick up again with renewed vigor. The next step is seen as providing access to new products by major intermediaries. And the information that Morgan Stanley and UBS are working in this direction supports the bulls on BTC/USD.

The increase in venture investments in crypto projects indicates a growing interest in the industry. Startups in this area attracted $2.5 billion in the first quarter, which is 32% more compared to October–December.

At the same time, the rise in the ratio of Bitcoin to the second-largest cryptocurrency by market capitalization, Ethereum, to the highest level since April 2021, indicates a decrease in risk appetite. This could pressure BTC/USD quotes, at least in the short term.

Dynamics of Bitcoin-to-Ethereum Ratio

In my opinion, digital assets support U.S. stock indices. The S&P 500 and its counterparts managed to withstand the storm caused by the acceleration of inflation in March. The rise in consumer prices to 3.5% practically ruled out the possibility of a rate cut in June. Expectations shifted to July–September. It would seem that risky assets should come under pressure. However, a strong economy and expectations of a 3.2% QoQ and 9% YoY increase in corporate profits extend a helping hand to American stocks.

Global risk appetite remains consistently high, allowing Bitcoin to consolidate near the psychologically important level of 70,000.

Technically, on the daily BTC/USD chart, there was a breakthrough of the upper boundary of the triangle. Returning quotes to its limits with a successful test of fair value at 69,650 would be evidence of the bulls' weakness and a reason to sell. Conversely, updating the local high at 72,715 will pave the way upward for the cryptocurrency. In this scenario, it makes sense to focus on purchases towards 77,500 and 92,000.