Bitcoin’s Path to $110,000: Analysts Predict New All-Time High Amid Easing Inflation and Rising Liquidity
Key factors driving this price rally include easing inflation concerns and rising global liquidity, which are providing favorable conditions for Bitcoin’s price surge.
Two Consecutive Weeks of Price Growth
Bitcoin has been on an upward trajectory for two consecutive weeks, with a bullish weekly close just above $86,000 on March 23, according to CoinMarketCap data. This price action has fueled optimism among analysts, who believe that Bitcoin is poised to hit the $110,000 mark before encountering any major price pullbacks.
Arthur Hayes, co-founder of BitMEX, is particularly optimistic, citing the Federal Reserve’s shift from quantitative tightening (QT) to quantitative easing (QE) as a primary factor supporting Bitcoin’s rally. Hayes has bet that Bitcoin will reach $110,000 before revisiting the $76.5k mark, pointing to the central bank’s policy shift as a major catalyst.
Federal Reserve’s Policy Shift and Bitcoin’s Potential Rally
Hayes stated on March 24 in a post on X: “The Fed is going from QT to QE for treasuries. And tariffs don’t matter cause of ‘transitory inflation.’” He further suggested that if Bitcoin hits $110,000, the next significant price level could be $250,000, indicating strong long-term optimism.
Quantitative tightening (QT) refers to the process of the Federal Reserve shrinking its balance sheet by selling bonds or allowing them to mature without reinvesting the proceeds. On the other hand, quantitative easing (QE) involves the Fed purchasing bonds and injecting money into the economy, which can lower interest rates and stimulate spending.
Market Reactions to Federal Reserve’s Moves
Although the Fed has slowed the pace of QT, it has not yet fully transitioned to QE. Some analysts, like Benjamin Cowen, founder of IntoTheCryptoVerse, noted that while the pace of QT has been reduced from $60 billion per month to $40 billion per month, the Fed still has $35 billion per month coming off its balance sheet from mortgage-backed securities.
However, market participants are eagerly awaiting the Fed’s expected pivot to quantitative easing, which historically has had a positive impact on Bitcoin’s price. During the previous QE period in 2020, Bitcoin’s price surged more than 1,000%, rising from around $6,000 in March 2020 to a then-record high of $69,000 in November 2021. Many analysts believe a similar setup is forming once again, setting the stage for another major Bitcoin price rally.
The Road Ahead for Bitcoin
As Bitcoin continues its upward trajectory, the combination of easing inflation concerns, rising liquidity, and potential QE from the Federal Reserve has fueled hopes for a sustained rally. With Bitcoin already seeing a significant rise, market watchers are closely monitoring the next few months to see if it can reach the $110,000 milestone, with some even predicting that a rally to $250,000 could follow. The evolution of the Fed’s policies and broader economic conditions will play a crucial role in shaping Bitcoin’s future price movements.
Editorial Team
Reporter at Coindoo
