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07.02.2024 09:24 PM
Bitcoin is on the verge of parabolic growth

Renowned crypto analyst Peter Brandt, assessing the current dynamics of the leading cryptocurrency, stated that Bitcoin is on the verge of parabolic growth. His bullish statement, based on the Elliott Wave Theory, claims that recent BTC charts seem to mimic a pattern indicating potential parabolic acceleration in the price growth of Bitcoin. Brandt notes that Bitcoin is in the final phase of the downturn and is about to start a new upward cycle.

The expert points out that the price of BTC demonstrates a continuous upward trend along the support line of the parabolic formation. In this formation, Bitcoin follows a four-stage cycle: crash, bump, bump, and decline. Accordingly, BTC has already experienced the "dump" phase and is at the beginning of a new cycle.

Although this indicates the start of a new bull market after the cryptocurrency's downturn phase, Brandt notes that BTC is in a new growth phase. He stressed that such cyclical regularities have repeated in the past and is repeating again.

As a result, if Bitcoin maintains the support line of the parabolic ascent formation and surpasses resistance levels, the parabolic growth predicted by the analyst for Bitcoin will occur. However, if BTC fails to hold the support level, the expected growth may be postponed.

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What's happening on the macro level: Reflecting on the events of the past year

Stepping away from the local technical picture, let's look at events happening on the macroeconomic front. In the first quarter of last year, a significant event occurred that affected cryptocurrency markets. We witnessed the collapse of regional banks that did not properly adjust their risks as the Federal Reserve quickly raised interest rates. It seemed that the situation was resolved at that time thanks to the Fed injecting more liquidity into the markets and selling troubled banks.

Numerous banks, including Signature Bank—which focused on cryptocurrencies—went bankrupt. One of these banks, whose shares fell by almost 60% in 2024, raised the question of whether similar events could happen again.

As the first anniversary of the initial shocks approaches, shares of New York Community Bancorp (NYCB) lost 30% of their value in just five days.

What's happening in 2024

A year later, the bank's shares continue to cause concern. Some experts believe this signals a period reminiscent of events from the previous year. Benjamin Cohen noted the bank's market value falling to 1997 levels, indicating that investors remain unprotected.

In March 2023, Bitcoin experienced sudden fluctuations as regional banks began to collapse, and the Bank Term Funding Program (BTFP) of the Federal Reserve helped alleviate the burden of troubled banks. However, the program was halted, and now banks have to act independently.

Former CEO of BitMEX, Arthur Hayes, had previously emphasized the risk of volatility associated with this situation. Hayes suggests that BTC could see an impressive recovery after falling to $30,000 if a similar scenario unfolds.

The losses of NYCB led to another downgrade by the rating agency Moody's. The Chinese CSI 1000 index also suffered losses of trillions of dollars in the last quarter and fell by 8% on February 5th when it was announced that there would be no bailout.

All of this indicates that, while macro-level fluctuations continue, the price of Bitcoin may also experience significant volatility. We might be in the early stages, but there is a possibility that these discussions will become a reality in the coming months.

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