Prediction: This will be Bitcoin’s next big move

Even after a steep dive earlier in August, Bitcoin (BTC 0.53%) is still nearly 40% for the year. That’s the good news. The bad news is that Bitcoin has recently fallen back below $60,000 and shows few, if any, signs of recovering anytime soon. During the last 30 days, Bitcoin has fallen by 11%. In fact, August is shaping up to be Bitcoin’s worst month since April.

But I think many of the fears of the Bitcoin bears may be overstated. In fact, I predict that the next big move for Bitcoin will be a recovery to $100,000 by the end of the year.

Why is Bitcoin Falling?

As a first step, it is important to find out why Bitcoin has fallen. The best explanation, from my perspective, is that inflows into the new spot Bitcoin exchange-traded funds (ETFs) are slowing down, putting a brake on any upward Bitcoin price action. Since the launch of the new spot ETFs in January, the steady influx of new money into Bitcoin has pushed prices up. So if this inflow dries up, it makes sense that Bitcoin will trade sideways or down.

In addition, investors were naturally spooked by the flash crash in August, when the price of Bitcoin and other cryptocurrencies literally collapsed overnight. So, from a sentiment perspective, it makes sense for investors to become much more cautious about which risk assets they are willing to put their money into. The new narrative is that investors are rushing to pull their money out of Bitcoin so they can put it into Nvidia (NVDA 0.61%).

So, for Bitcoin to begin its rise to $100,000, investor sentiment must improve and flow into the new location Bitcoin ETFs must return to their previous pace. And that seems to be what is happening. During the final days of August, the spot Bitcoin ETFs posted eight straight days of positive inflows.

Key catalysts ahead

There are two key catalysts that could help boost ETF inflows and restore investor confidence in Bitcoin. The first is the Bitcoin halving, which took place in April, which slowed the rate of new coin creation. At the time, it was heralded as the most important crypto event of the year, and was supposed to cause Bitcoin to skyrocket in price. Until now, however, the halving has been a no-brainer, and many investors may have forgotten about it entirely.

But there is increasing reason to expect that the real impact of the halving will be felt as we enter the final months of the year. For example, historical evidence suggests that it takes at least 200 days after the halving date for Bitcoin to kick into a higher gear. And guess what: 200 days from the time of the Bitcoin halving on April 19 brings us to the end of October as the potential start date of a new Bitcoin bull market cycle.

This is the same pattern that occurred during the previous Bitcoin halving cycle in 2020. As can be seen from the chart below, Bitcoin lurched toward its May halving event during the summer and early fall, before moving into a new higher gear in the last months of the year. Of course, there is no guarantee that the same pattern will occur again, but my fingers are crossed.

Bitcoin / US dollar chart by TradingView

The second important catalyst is the US presidential election. Pro-crypto sentiment seems to be building on both sides of the political aisle and Bitcoin has actually emerged as a campaign issue. The biggest impact will be felt if the Republicans win the White House because Donald Trump is the first ever presidential candidate with a pro-Bitcoin agenda.

But there is reason to think that the Democrats could also be persuaded to pass comprehensive pro-crypto legislation that would make investing in Bitcoin much more attractive. Either way, Bitcoin could benefit from a so-called relief rally as investors step back into crypto in November.

How likely is $100,000?

Admittedly, for Bitcoin to nearly double in price and hit $100,000 by the end of the year, a lot of things will have to go right. But if ETF inflows revive, and if crypto sentiment turns bullish again, it just might happen. Also keep in mind that there could be a number of positive surprise opportunities – such as China reversing its ban on crypto – that could unlock a tremendous amount of upside potential for Bitcoin.

Throughout Bitcoin’s 15-year history, a strategy of buying the dip has usually paid off for investors. And I don’t think this time will be any different. This could be the last time to buy Bitcoin at such a discounted price. By the end of the year, six-figure Bitcoin could be the new normal.