Michael Van de Poppe, founder of MN Trading, forecasts a potential bull market for Bitcoin (BTC) in the next one to two years. He highlights the recent downtrend in yields of 2-year and 10-year Treasury bonds, suggesting a shift in market sentiment. The inversion of yields typically indicates economic uncertainty or a poor growth outlook, leading to short-term interest rates surpassing long-term ones.
Van de Poppe notes the yield trends as a response to the Federal Open Market Committee’s (FOMC) monetary policy decisions. With the end of tightening practices, the November inflation figures, which fell below the Fed’s annual 2% target for the first time in over three years, could be promising news for the Fed. This development, coupled with expectations of interest rate cuts next year, has improved market sentiment during the holiday season.
The anticipated Federal Reserve cuts are generally positive for tech stocks as they lower corporate borrowing costs. Bloomberg reported in September 2023 that Bitcoin’s price movement has realigned with tech stocks after briefly diverging in June. Thus, technological advancements and cheaper financing could help Bitcoin’s price rise after a stagnant year.
Van de Poppe also points out that a similar yield curve trend preceded the 2018 bull market, reflecting the current market trajectory. While positive macroeconomic factors suggest a potential Bitcoin bull run, the market is also approaching a halving event in a few months. As of December, Bitcoin’s price had surged to its highest level of the year at $44,000, indicating an approximate 160% increase, though still about 37% below its all-time high of $69,000 reached in 2021.
