Source: PaxForex Premium Analytics Portal, Fundamental Insight
Approaching the year 2024, it's prudent for investors to take a reflective pause and evaluate their portfolio allocations. Delve into a thoughtful analysis, identifying positions ripe for profit-taking and those potentially warranting increased investment.
As we stand on the brink of the new year, pivotal variables loom large that could sway the markets in unforeseen ways. Factors such as potential interest rate cuts from the Federal Reserve, the looming specter of a US recession, and the inherent volatility inherent in election years are poised to influence market dynamics. Navigating these somewhat uncertain macroeconomic conditions prompts the consideration of diversification into alternative assets within one's portfolio.
Traditionally, alternative investments encompass commodities like gold, tangible assets such as real estate, or even unconventional holdings like artwork. However, in recent years, a disruptive asset class has emerged, capturing both attention and substantial capital investment: cryptocurrency.
While cryptocurrency is still relatively nascent in the realm of asset classes, initiating a modest position in Bitcoin could prove to be a shrewd move for investors eyeing the long term. With Bitcoin currently trading at around $42,000 per token, its apparent valuation might not scream "bargain." Yet, numerous catalysts on the horizon could propel its value considerably higher in the year 2024.
As economic forecasts oscillate between recession warnings and indicators signaling resilience, the prospect of a recession in 2024 remains uncertain. Contrary to the ominous predictions, metrics such as job growth, unemployment, and inflation persistently convey resilience, suggesting a recession might not materialize next year. Examining the real gross domestic product (GDP) growth rate depicted in the chart below reveals an annualized growth rate of 4.9% in the latest quarter, surpassing the long-term average and indicating a slight uptick from the previous quarter. While a recession might be averted, the landscape for 2024 holds several reasons to contemplate Bitcoin as a viable investment.
With 2024 designated as an election year, a period historically synonymous with heightened market volatility, investors face potential turbulence. The looming uncertainty surrounding candidates and their policy proposals often triggers pronounced trading activity in specific market sectors. Considering the likelihood of significant volatility, investors without a well-diversified portfolio might encounter challenges. Notably, certain industries, such as technology, have outperformed the broader market in recent times, with tech stocks, fueled by optimism in artificial intelligence (AI), posting substantial gains.
While the demand for AI might persist into 2024, concerns of overbought tech stocks prompt a cautious approach. Investors are advised to reassess their portfolios, considering trimming positions in certain sectors and redirecting capital toward asset classes that could experience renewed interest. Cryptocurrency emerges as a fitting option for those comfortable with a degree of speculation.
A pivotal catalyst for Bitcoin in 2024 lies in the potential launch of one or more spot Bitcoin exchange-traded funds (ETFs). The approval of such ETFs by the Securities and Exchange Commission (SEC) would signify a crucial validation of cryptocurrencies and could instigate a bullish trend. Additionally, the upcoming Bitcoin halving, a recurring event where miners' rewards are halved, has historically triggered increased buying activity and surpassed previous price highs.
The convergence of election-induced market volatility, regulatory momentum, and the anticipated Bitcoin halving cycle fosters a bullish outlook for the cryptocurrency in the coming year. Despite its notable surge in 2023, the prospect of Bitcoin surpassing its record high and venturing into six-figure territory in 2024 is plausible. Hence, investors may find prudence in considering a modest position in Bitcoin at present.
As long as the price is above 39000.00, follow the recommendations below:
- Time frame: D1
- Recommendation: long position
- Entry point: 42603.00
- Take Profit 1: 45000.00
- Take Profit 2: 47000.00
Alternative scenario:
If the 39000.00 level is broken-down, follow the recommendations below:
- Time frame: D1
- Recommendation: short position
- Entry point: 39000.00
- Take Profit 1: 36000.00
- Take Profit 2: 34000.00
