Crypto 2024 Outlook

• TradFi 2023 recap (SPY, NDQ, DXY)

• Crypto 2023 recap (ETH, TOTAL)

• Bitcoin 2024 game plan and predictions

Read time: 5 minutes

Expectations for aggressive rate hikes in 2023 put downward pressure on stocks and crypto in 2022. In 2023, the sentiment and performance flipped as the markets began pricing in rate cuts in 2024.

The contrarian case for rates to remain higher for longer is AI. Goldman Sachs says generative AI adoption could put upward pressure on interest rates because of boosts in productivity. For what it’s worth, Goldman Sachs’ prediction at the end of 2022 for rates in 2023 ended up being spot on.

The Dollar (DXY) has had a dismal past few months as markets price in rate cuts. However, it’s now back at support—the bottom of the range it’s been in for a year and a half.

This adds to the contrarian case for rates to remain higher for longer, the dollar to strengthen, and stocks and crypto to go down, but I won’t be taking that trade because I expect a “Biden Bailout” going into the 2024 Election.

If the dollar breaks down below 101.5, it would signal game on for risk assets.

The S&P is up almost 25% this year, back to the era of zero interest rates and massive amounts of money printing. I wouldn’t be surprised to see a small pullback at this level, but it’s hard to be bearish on a chart that looks this strong.

I’ll be DCA-ing into index funds in 2024.

Tech stocks had a monster year with the AI boom providing tailwinds. The Nasdaq is up over 50% and is now making new all-time highs.

If the year closes above 16700, I won’t be expecting a pullback, I’ll be expecting continuation higher.

I’ll be DCA-ing into index funds and selectively taking swing trades on individual tech stocks.

Money that panic-fled crypto after FTX collapsed has returned. The total market cap of crypto broke out in November on the back of the ETF news.

ETH has underperformed BTC since September, 2022. Gains in alts have primarily been concentrated in Solana and Stacks, up 750% and 600% respectively.

When you remove Solana, Bitcoin, and Ethereum from the total market cap of crypto, it shows that alts are only up about 50% this year. That’s not too shabby, but pales in comparison to Bitcoin’s 150%+ rally this year.

Reclaiming 0.055 would be the first signal of rotation back into ETH.

Zooming out to Bitcoin’s quarterly chart, the long-term picture looks extraordinarily bullish because:

• This quarter, BTC bounced off the 20-quarter moving average (solid grey line) which has been an important signal in the past

• It’s in an uptrend

BTC is at an area of resistance now though, so maybe it pulls back slightly at the beginning of next year shortly after the ETF is officially approved.

I’m predicting $80K BTC by late 2025. Percentage wise, that’s in line with the stock market this year.

I’d be interested in buying $35K again if it pulls back that far but I don’t know if it will. My predominant strategy for 2024 and beyond will be to DCA and HODL.

I believe that Bitcoin won’t have massive bull or bear cycles like in the past but that it will perform well in the coming years and decades because of both technicals and fundamentals.

BTC’s Weekly chart isn’t saying much right now other than that the game plan I developed and shared starting back in August has performed well. It’s a little overextended beyond where I think swing trades have favorable dynamics, but it seems like a fine time to DCA and HODL.

Unlike on the weekly chart, there are a lot of interesting signals on the table on the daily chart.

To keep it brief, I’d be:

• Bullish above $44K

• Bearish below $40K

I’m neutral in the short-term for now. It’s hard to be bearish with the ETF narrative going on right now.

• Crypto moves from the missionary era to the mercenary era as TradFi takes over. Signals of this happening are 10+ companies competing over the ETF market rather than innovating and Bitwise copying the most interesting man in the world ad rather than creating something new.

• No more major bull or bear cycles. Bitcoin will perform as well as or better than the stock market for the next few years, but there won’t be as big of gains to be had as in the missionary era.

• Binance will slowly decay into irrelevance because Founder, CZ is out and compliance monitoring is in.

• More OG missionary founders will get pushed out (“step down”) of their companies by mercenaries in 2024.

• Something bad happens to Digital Currency Group, Grayscale, and or GBTC.

• The spot ETF will at some point be a “buy the rumor, sell the news” event that leads to a moderate pullback. I expect the initial approval to lead to quick rally. But it could sell off either right after that, or closer to when the ETFs actually go live.

• I expect that the spot ETFs will get approved, but if on the small (2%?) chance they do not, it would be a black swan event that would likely present buying opportunitites at much lower prices.