Pseudonymous analyst CryptoCon remains confident that Bitcoin will rise nearly 25% above its all-time high of $73,679, despite the Federal Reserve’s recent “hawkish tone.” This surge is seen as a crucial “next step” before Bitcoin eventually reaches the cycle’s peak of $123,832.
Bold Prediction Amid Fed’s Stance
CryptoCon reiterated their forecast of a $91,539 Bitcoin target in a June 12 post on X, following the release of the Federal Reserve’s meeting minutes. The minutes revealed that the Fed plans to maintain current interest rates and reduce the expected rate cuts from three to just one this year. Despite this cautious outlook, CryptoCon remains optimistic about Bitcoin’s upward trajectory.
The Magic Bands Model
CryptoCon’s prediction relies on the “Magic Bands” model, which divides Bitcoin’s price cycle into levels based on historical peaks and bottoms. The model suggests that once Bitcoin surpasses its current all-time high, it will progress to the next price level. According to this model, Bitcoin is currently consolidating within level 2.5. Once this phase concludes, the price is expected to reach level 3 at $91,539, followed by the ultimate “Cycle Top Target” of $123,832.
An increase to $91,539 would represent a 34% spike from Bitcoin’s current price of $68,315, as per CoinMarketCap data. “Taking some time to reach it at Level 3 of the Magic Bands but it’s the next step,” CryptoCon added.
Market Reactions to Fed’s Tone
The Federal Reserve’s “hawkish tone” typically implies a stricter stance on controlling inflation, which can influence investor behavior. When interest rates rise, traditional lower-risk assets such as bonds become more attractive, potentially reducing demand for riskier assets like Bitcoin. Conversely, lower interest rates make bonds less appealing, driving investors toward assets like Bitcoin.
MN Trading Consultancy founder Michaël van de Poppe expressed concern over the Fed’s stance, noting that Fed Chair Jerome Powell’s speech and projections heavily influence Bitcoin markets. “The hawkish tone of the FOMC isn’t positive. Powell’s speech and projections are market-leading for Bitcoin,” van de Poppe wrote in a June 12 X post.
Independent analyst Ted Talks Macro also noted the unexpectedly hawkish stance of the FOMC.
Also Read: US Inflation Drops to 3.3% in May 2024: Implications for Federal Reserve Policy
Contrasting Views on Inflation
Markus Thielen, head of research at 10x Research, believes the FOMC’s expectations might be unrealistic. “The FOMC will likely have to lower their expectations later in the year, as we have already seen the high for this year’s inflation prints,” Thielen told Cointelegraph.
Despite the Fed’s cautious outlook, market reactions to inflation data have been positive for Bitcoin. Month-on-month Consumer Price Index (CPI) figures were unchanged, and the year-on-year tally was 3.3%, both slightly below forecasts. Following the CPI announcement, Bitcoin surged by $1,500 to reach $69,636, Cointelegraph reported on June 12.
Thielen noted, “A lower CPI has been bullish for Bitcoin, while a higher one has been bearish – leading to the sell-offs in January, March, and April.”
