Weekly Market Review 01/09
Key Takeaways
- Bitcoin finished 2024 with a 120% return, highest among asset classes
- Bitcoin volatility has held lower in recent years, set for a spike in 2025
- A Bitcoin price move above the $100k level may lead to a +20% move in Q1
Digital Asset Commentary
After another year was added to the asset class returns quilt, Bitcoin once again finished at the top with a +120% return. Since 2013, BTC has provided the best returns in every risk-on year when compared to other asset classes (Swan). Despite also being known as the nitroglycerine of asset classes, BTC volatility has dampened dramatically in recent years. Volatility spikes have shown diminishing excitement at the cycle peaks of 2013, 2018, and 2021. Using volatility accelerations as your guide, you would likely be unable to identify the current ATH when compared to previous cycles and may hint at further upside volatility to come over the next year.
Recent US Dollar strength and negative liquidity headwinds have been battling the upcoming regulatory clarity and potential Strategic Bitcoin Reserve tailwinds. USD bullishness seemed to have found a reprieve after an article in the Washington Post hinted at more targeted industry-specific tariffs opposed to the broader universal tariff. Trump lambasted the article on social media, calling it “Fake News”. Nevertheless, bearish volatility in the DXY was enough to help push BTC prices higher during the US session Monday, after the end of year stalemate below the $100k level. A resounding breach of the current range would invalidate a multi-shouldered Head & Shoulders (H&S) bearish reversal chart pattern which had been brewing since the initial move above $92k in late November. The bullish negation of the H&S suggests an upcoming potential measured move in the $120k - $130k range.
