As the first quarter of 2024 draws to a close, Bitcoin has witnessed an impressive 65% rally. However, market analysts are starting to notice signs of potential fatigue
As the first quarter of 2024 draws to a close, Bitcoin has witnessed an impressive 65% rally. However, market analysts are starting to notice signs of potential fatigue.
Slowdown After Exponential Growth
After an "exponential" first quarter, Bitcoin's price growth has slowed down. Bitcoin market observers are now watching the weekend closely as key weekly, monthly, and quarterly closes coincide.
Despite the transformative growth seen at the start of the year, Bitcoin's price action continues to struggle to break new all-time highs and establish new support levels.
Outlook for Q2
According to QCP Capital, the outlook for the second quarter remains "very bullish" despite the signs of fatigue. The firm cites several bullish factors:
- Continued demand for spot Bitcoin exchange-traded funds (ETFs) (decreasing supply as GBTC dwindles)
- Bitcoin halving
- Exchange-traded notes (ETNs) on the London Stock Exchange
- Potential approval of an ETH spot ETF
Signs of Fatigue
QCP, however, also acknowledges that Bitcoin is now showing some "clear signs of fatigue." This is largely due to the parabolic price action seen in the first quarter. Market analysts also point to waning interest in Ethereum and consistently high funding rates on major exchanges. "While we remain bullish, we would take a cautious approach with leverage and look to pick up some value on larger dips," he said.
Historical Context
Bitcoin's monthly chart aligns with its historical pattern. According to the latest live data, BTC/USD is up 65.4% year-to-date. This is set to rival the 65% gain seen in Q1 2023, with a difference of just 6%. Should BTC/USD close significantly above $61,000, it would mark the seventh consecutive month of positive monthly closes. Such an occurrence has only happened once before in Bitcoin's history, back in 2012.
Despite the impressive gains in the first quarter, Bitcoin is now showing some signs of fatigue. Market analysts advise caution with leverage and to monitor price action closely. However, the outlook for the second quarter remains positive, driven by the continued demand for spot ETFs, the Bitcoin halving, and other bullish factors.
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