Bitcoin’s price history shows a clear pattern: when market leverage is low and U.S. retail sales exceed expectations, BTC tends to rally by at least 50%. This has occurred during key periods in 2021, 2023, and 2024.
Investors have long been fascinated by the fluctuations in the price of Bitcoin, but research reveals two recurring trends that consistently precede significant rallies. In the past, Bitcoin has risen by at least 50% in a short timeframe when low market leverage and higher-than-expected U.S. retail sales were present.
As the market evolves, staying informed about these indicators can help investors make more informed decisions and capitalize on emerging opportunities.
Low leverage makes investors less dependent on borrowed money to expand their positions because it suggests that the cryptocurrency market is uncertain and cautious.
An instance of this was observed in early 2024, when the annualized funding rate for Bitcoin perpetual futures on Binance dropped to a remarkably low 4%. This signifies that leverage was neutral and readying for a bullish rally.
Retail sales serve as a key indicator of consumer spending and the overall health of the economy. When these numbers exceed consensus, it gives investors confidence across all markets, including cryptocurrencies.
America's retail sales for December 2023 increased 0.6% month-over-month, outperforming expectations of a 0.4% rise in January 2024. The unexpected strength fueled bullish sentiment in the Bitcoin market.
At the end of January 2024, between January 25 and March 13, Bitcoin jumped to $ 73,500 from a value of $ 40,000 within the period of seven weeks, up 84% with very low market leverage and strong indications, as detailed before. In fact, on January 31, 2024, Federal Reserve Chair Powell's press conference on tighter monetary policy made Bitcoin more attractive as an alternative asset.
Violation collection, a 50% increase from $16,700 to $25,100, was posted by Bitcoin between January 3 and February 20, 2023. Just before this rally began, the market had remained under $18,000 for some time before suddenly making it possible for low leverage.
The increase was driven by retail sales, which showed a month-on-month growth of 3% in January 2023, far above the 1.9% increase forecasted.
In addition, Powell's speech on January 10, 2023, at the Sveriges Riksbank highlighted concerns about inflation, which in turn affected investor views.
Between July 20 and September 7, Bitcoin was lifted by a whopping 76%. The event dropped below $30,000, with market sentiments and leverage significantly hampered. Turnaround boosted by June 2021 retail sales data, which, against forecasts of a decline by 0.4%, instead showed an unexpected increase of 0.6 %.
Powell's remarks at the Jackson Hole Economic Symposium on August 27, 2021, indicated a potential.
Stable price growth is made possible by low market leverage, which indicates cautious investor sentiment and lowers the risk of abrupt liquidations.
Higher-than-expected retail sales are a sign of a healthy economy, which often boosts confidence in riskier assets, such as Bitcoin.
Hawkish Fed signals could make traditional assets less attractive, prompting investors to turn to alternatives like Bitcoin.
This pattern suggests that movements in retail sales and market leverage may provide valuable clues about potential future Bitcoin rallies. Powell's speech is scheduled for June 18, followed by the release of the Beige Book on July 16, and the Jackson Hole Economic Symposium, which begins on August 21, and can provide additional insights.
Additionally, U.S. retail sales figures for May and June, which are expected on June 17 and July 15, respectively, will carry significant importance in terms of consumer spending.