Bitcoins bullish momentum remains strong according to analysts

Bitcoin’s correlation with macroeconomic factors continues to be a widely discussed topic as both global monetary policies and the cryptocurrency’s price have experienced a slump in the past month. Lucy Gazmararian, founder and managing partner of Token Bay Capital, discussed this correlation in an interview with CNBC, highlighting that Bitcoin can move in sync with the stock market. This trend is becoming more apparent as digital assets become intertwined with traditional finance. The correlation between Bitcoin and macroeconomics is attributed to factors such as geopolitical uncertainty and global monetary policies, such as rate hikes or cuts implemented by the US Federal Reserve. However, there are instances where the correlation breaks down due to Bitcoin’s unique characteristics compared to other asset classes like bonds and equity. Despite Bitcoin’s 9% drop in the past 30 days and concerns about US inflation, Gazmararian believes that the current bull run is only halfway through at most. She referred to previous “four-year boom busts” observed in the crypto market, suggesting that the ongoing market retracement is a typical occurrence in previous cycles, particularly after the halving event. Gazmararian explained that drops of 10% to 30% align with past cycles, with historical data showing slumps of up to 40% following Bitcoin’s quadrennial code change, followed by significant price surges. In fact, BTC has never returned to its pre-halving prices after completing the transition. Based on this pattern, Gazmararian predicted that there could be a Bitcoin peak in late 2025. However, she also noted that if the asset’s value declines by more than 50% in the coming months, it may raise doubts about the continuation of the bull run. Currently, over 84% of long-term BTC holders are in profit, while 71% of short-term buyers are experiencing losses. Aggressive declines could result in significant losses for these short-term buyers who acquired the cryptocurrency at higher price levels.