If Bitcoin goes up or down in price will depend on the Markets generally most likely, and they the Markets depend on the Federal Reserve Bank (FED) USA. Their mandate is a dual one, price stability, not letting Inflation get out of hand and Low Unemployment numbers. For a long time now they have taken on a third unofficial mandate making sure Stock Prices do not fall too far too fast.
Last December was a real scare for the Wall-Street-Investors. They had the worst drop since the 1930s in that one month forcing the FED to stop increasing Interest Rates and taking money out of the Market place. Analysts are speculating now if the FED might even start Lowering the Interest Rates again even though Inflation is under control and Unemployment at record lows. The Economy is running not too fast and not too slow, so what is going on.
The FED is trying to normalize Interest Rates which in the past were around 6% and reduce its Balance Sheet to more sustainable levels which means taking money out of the system. Lots and lots of money out on a monthly basis. The Stock Market showed the FED in Dec. 2018 that’s a no go area. The DOW Index dropped from 25,800 to 21,800 that’s 4,000 pts or almost 16% major fall out.
So the FED says we will reconsider our policy which gives the Traders on Wall-Street the signal Stocks are back in. The FED will not make us suffer.
Well it was Bitcoin in the first place which forced the FED to start raising Interest Rates as the price was heading to $20,000/btc. Now what we seem to see is that they are not willing to let Markets correct to more traditional valuations (PE-Ratios are way to high) and will not further reduce their Balance Sheet to more safer levels, then we have to assume that Inflation will get out of hand and this again will be the catalyst for Bitcoin to bottom out and start a new Bull-Run.
Two Pension funds one of them from the police have decided this is a good area (Blockchain) to invest in. These are conservative Investors, so the conditions are most likely rip that the Cryptos will soon head north again. With a little help again from the FED and the Fear-Of-Missing-Out (FOMO) from other Pension Funds that they better get their act together before its to late to get in cheaply should change sentiment in favor of Bitcoin in general but also in Alt-Coins also.
This next chart I have put together to show the supply of Btc over time, the Btc Block Reward splitting intervals combined with a Bitcoin Chart price Logarithmic in scale.
Speculation:
Bitcoin should be on its way to $4,500 level approximately then pull back one more time to scare the last ones out to resume then its Bull Trend. It is hard to say now how fast we will see new highs, it depends on Politics and the FED. They have the most influence over society and Investors and if they make too many mistakes without revising them quickly things could well play into Bitcoins hands sooner then later.