The parabolic rise is arriving

Why you won’t see Bitcoin at $20,000

Almost a year ago, I introduced the concept of the Bitcoin Triangle. Back then, Silicon Valley Bank had just failed and BTC was rallying from $20,000. The stealthy uptrend continues and there are no signs of weakness as Bitcoin reaches $47,000. Let us revisit the Triangle, assess the current trend, and undoubtedly conclude that new all-time-highs on Bitcoin are arriving sooner than consensus expectations.

The Triangle's premise is straightforward yet powerful: peak interest rates, a fragile US regional banking system, and persistent inflation fears uniquely position Bitcoin for growth.

Not long ago, Fed Chair Jay Powell touted a "higher for longer" stance on US interest rates. In just a few months, the narrative has shifted. The debate now centers on whether the Fed's initial rate cut will occur in March 2024 or later. This anticipated shift towards lower real rates bodes well for assets like Bitcoin.

To declare the US banking system as collapsing would be an overstatement. The ETF for US Broker-Dealers and Securities Exchanges are nearing all-time highs and giants like J.P. Morgan are already there. However, this image of strength isn't universal. A case in point is New York Community Bancorp, whose stock plummeted 50%+ this week. This underlying fragility, especially in smaller banks, suggests a vulnerability in the system at large, potentially curbing the Fed's capacity for stringent monetary policies.

Inflation, though seemingly under control, leaves a lingering shadow. The scars of 2022's inflationary surge won't fade overnight, and this perception alone can support Bitcoin's ascent.

Since 12 months ago, all the factors of the Bitcoin Triangle have only strengthened.

Catalysts for 2024

The array of potential catalysts poised to propel Bitcoin's price is extensive. Before delving into future possibilities though, it's crucial to acknowledge the dissipation of FUD (Fear, Uncertainty, and Doubt) that plagued the crypto world in 2022 and 2023. The period was rife with concerns over Binance's possible collapse under U.S. regulatory pressure, the FTX estate liquidating billions in assets, and anticipated SEC interventions.

However, 2023 marked a triumphant year for cryptocurrencies. First, Binance amicably settled with U.S. authorities, maintaining its stature as a leading exchange. The market then absorbed all of the estate asset selling with unyielding demand. Lastly, the SEC faced defeats in its lawsuits against XRP and Grayscale, even being compelled to greenlight the spot Bitcoin ETF.

With the most significant threats now in the rearview mirror, the crypto landscape has shifted dramatically. Blackrock CEO Larry Fink now goes to CNBC on a regular basis to promote Bitcoin. What a plot twist.

Looking ahead to 2024, several potential catalysts could continue to fuel the Bitcoin rally:

1. Escalating tensions between Texas and the U.S. Federal government over border issues

2. Prohibiting Trump from presidential candidacy, potentially sparking protests from his supporters

3. Intensifying geopolitical conflicts worldwide

4. Ongoing vulnerability in the U.S. regional banking system, casting doubt on the survival of institutions like New York Community Bancorp

5. The anticipated Bitcoin Halving

6. Broadening adoption of cryptocurrencies, fueled by:

   1. Innovative applications like the Farcaster social media platform

   2. The influx of VC-funded startups from 2021 and 2022 launching new projects and tools

7. Increasingly serious discussions surrounding U.S. federal debt

Assessing the Current Trend

Some might dismiss the Bitcoin Triangle concept and argue that catalysts are most effective when the asset's price is already trending upward. Well, Merry Christmas, because we're witnessing one of the most robust Bitcoin trends in history.

Reflecting on the 2021 surge starting from the lows of March 2020, Bitcoin's retracements never exceeded 30% until it hit the $40,000 mark. However, after reaching a peak of ~$69,000, it experienced a 50% drop – a clear indication that the bullish trend had reached its zenith. At its current maturity level, Bitcoin should not be seeing a 50% decline amidst a strong uptrend.

Since November 2022, Bitcoin's pullbacks have been consistently contained within the 20-25% range. This represents one of the most modest series of dips for such a significant price movement in its history. For those analysts predicting a retest of the $20,000 level, they are essentially declaring the end of the current Bitcoin rally – a scenario that seems highly unlikely. Not going to happen.

All aboard

When you look at the totality of facts, you’re even tempted to think of the word ‘supercycle’:

1. The foundational elements of the Bitcoin Triangle are bolstering Bitcoin's price

2. We have crossed the threshold of maximum FUD (Fear, Uncertainty, and Doubt). The majority of significant risks have been navigated

3. The year 2024 presents a myriad of catalysts

4. The broad American market now has easy access to Bitcoin through the newly launched spot ETF

5. Setting aside personal narratives and opinions, we are witnessing one of the strongest Bitcoin uptrends in history. The market, recognizing the same or a different set of facts, arrives at a similar bullish conclusion

The conditions for flight are undoubtedly pristine and the direction is clear. It's time to fasten your seatbelts and stay aboard until this remarkable journey reaches its destination.

All opinions are my own. This is not investment advice.