Is Bitcoin (BTC) on the verge of another big bull run?
Analysts say the cryptocurrency’s mid-term outlook is ‘looking far more bullish’ ahead of major US market announcements.
- Bitcoin could have a breakout if US Fed raises interest rates
- BTC USD's path to US$20,000 faces 'very little' technical resistance
- Price consolidation led to BTC being down 9% since recent highs
Bitcoin price: What is the near-term expectation?
Bitcoin (USD) could be headed for more rallies, depending on how the US Federal Reserve’s upcoming speech at Jackson Hole goes.
According to IG market analyst Monte Safieddine, Fed Chair Jerome Powell’s speech regarding monetary policy is 'expected to infuse more volatility into the greenback' while providing a boost to riskier assets, including cryptocurrencies.
A dovish statement – an expansionary monetary policy in which interest rates are lowered – could weaken the US dollar and boost riskier assets.
On the other hand, a hawkish outlook – in which interest rates are raised – has historically led to an opposite effect.
The general expectation among market observers is for the central bank to focus on raising inflation this round to around 2% on Thursday, an outcome that could potentially have a bullish impact on cryptocurrency prices.
‘Given the nature of crypto exchanges, conformist strategies on any significant change in US monetary policy may lead to breakouts that could hint at the printing presses staying on for even longer,’ said Safieddine.
BTC’s mid-term outlook is ‘far more bullish’
From a technical perspective, Safieddine wrote that ‘Bitcoin's technicals in the mid-term are looking far more bullish, with short-term pullbacks testing key levels’.
Traders who continue to HODL (Hold On For Dear Life) with an extreme buy bias at 90% - and even higher for the other crypto majors – are also creating upward pressure on BTC’s mid-term price.
Meanwhile, Cathy Wood, CEO of Ark Invest, also noted earlier this week that there is ‘very little resistance’ between the US$13,000 price level (once this figure is breached) and BTC’s all-time high of US$20,000.
‘We could stay in a new trading range, just at a little bit of a higher level than the recent six to 10. Maybe we’re in the US$10,000 to US$13,000 range. Nonetheless, a breakout,’ she said in a recent podcast interview.
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Why is the BTC USD price falling?
The crypto coin saw its price drop 1.5% on Wednesday (26 August 2020) evening, after rising earlier that day.
As at 08:00 GMT on Thursday 27 August 2020, BTC is trading at US$11,388 – a rough decline of 9% since hitting a 14-month high of US$12,500 on Monday 17 August 2020.
Given cryptocurrency’s speculative nature (and the prevalence of market ‘kicking’), price trends are often hard to elucidate, but the recent decline appears to be a result of market consolidation.
At the peak of its most recent price surge, several analysts had predicted that bitcoin was overbought and needed to ‘take a breather’.
One of them – Matt Maley, chief market strategist for Miller Tabak + Co, said: ‘It might be able to work off this condition with a sideways correction, but its upside potential is limited over the next week or two.’
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