Will Bitcoin break $71,000 amid U.S. election turmoil? No, Mt. Gox starts moving Bitcoin!

Bitcoin Price Surge Prediction: Bitcoin Could Reach $71,000

Timothy Peterson of Cane Island Alternative Advisors forecasts that Bitcoin could reach $71,000 by the fourth quarter of this year. He links Bitcoin prices to high-yield (HY) corporate bond rates, noting that changes in these rates reflect investor sentiment and risk tolerance. Peterson’s analysis is supported by two charts showing a positive correlation between HY rates and Bitcoin prices. This suggests that as HY rates increase, so does Bitcoin, indicating a higher risk appetite in the bond market could lead to more investments in Bitcoin. The ICE BofA US High Yield Index Effective Yield is highlighted as a key indicator, with Bitcoin prices rising when this rate falls.

Market Volatility and Election Impact

Peterson points out that markets are typically "flat and volatile" between September and October. The upcoming U.S. election adds to the uncertainty, particularly in October, leading up to the November 4 election day. Bitcoin is currently undergoing its largest correction phase after significant gains last year. Institutional adoption of Web3 protocols and digital assets has increased crypto liquidity and positive market sentiment. Peterson predicts Bitcoin could hit $100,000 by January if the HY rate drops below 6-7%. Currently, the U.S. high-yield rate stands at 7.16%. He bases this forecast on an indicator showing a median 6-month forward return of +59% when below -20%. With the U.S. election and potential interest rate cuts on the horizon, the likelihood of a bullish continuation later this year is high. This period will be closely watched by investors and analysts.

Mt. Gox Moves $3 Billion in Bitcoin

In another significant market development, Mt. Gox has moved 42,229 BTC, worth approximately $3 billion, from its cold wallet storage, as reported by Arkham Intelligence. A smaller transaction of 0.021 BTC, roughly $1,300, was likely a test. Despite starting refunds to investors affected by the 2014 hack, creditors may need to wait up to three months to receive their payments in Bitcoin or Bitcoin Cash. The timing of these payments depends on the specific crypto exchanges handling the claims. Previous large transfers by Mt. Gox have generated negative market sentiment, exacerbated by the German government's Bitcoin sell-off. These factors previously pushed BTC prices below $55,000, raising concerns about a similar impact this time.

Analyst Opinions

However, CoinShares analysts believe fears about the Mt. Gox payout's market impact are overblown. Their latest report suggests many creditors will likely hold most of their recovered coins to minimise tax burdens. They argue that when sales occur, they will likely be spread across various exchanges, ensuring sufficient liquidity to absorb selling pressure. Bitcoin is currently priced at $62,865 after a 10% weekly surge, with a 24-hour trading volume of $37.7 billion.

The market is currently influenced by significant events: Timothy Peterson’s prediction of Bitcoin reaching $71,000 amid U.S. election turbulence and Mt. Gox’s transfer of $3 billion in Bitcoin. While the forecast for Bitcoin hinges on high-yield rates and election outcomes, introducing uncertainty and potential volatility, the large-scale Bitcoin transfers by Mt. Gox also pose a risk of market instability. However, analysts suggest that fears regarding the Mt. Gox payouts might be overblown, and the market could absorb the selling pressure due to sufficient liquidity.