Is Bitcoin Heading for the Abyss or the Stars?
After a rough few days, Bitcoin appears to be stabilizing on Thursday. In the last day, the market value of the cryptocurrency with the greatest circulation increased by 4%.
The price of Bitcoin appears to be stuck in a range between two important support levels. A strong pullback could drive BTC down to levels last seen nearly a month ago if the current trend is rejected.
Since the 21st of June, the price of a single Bitcoin has oscillated between the range of $17,578 and $21,707. The resistance that was met from the 30-day Exponential Moving Average caused the effort to break out of the consolidation on July 7 to be unsuccessful (EMA).
This exponential moving average (EMA) has, on almost a hundred separate occasions, actively worked to forestall an increase in the price of bitcoin.
The market experienced a decline of 16 percent after the most recent rejection on July 8, which resulted in the formation of a double bottom.
The range from $18,600 to $19,252 was used as a starting point for the development of the W-bottom. This pattern caused BTC to surge by 10% to retest the weekly open at $20,845, where it is currently meeting resistance.
Since the price of Bitcoin has been hovering around $20,647 for some time now, investors are left speculating about the cryptocurrency's potential future course. Bullish predictions based on Bitcoin's price action during the previous three months and six rejections are doomed to fail until Bitcoin can turn the 30-day exponential moving average (EMA) into a support floor.
Bitcoin is expected to stay between the $20,845 weekly open and the $18,600 liquidity pool base for the time being.
The cryptocurrency Bitcoin appears to be stabilizing on Thursday after a rough few days. The largest digital currency has seen a 4 percent increase in market value over the past 24 hours.
The market was alerted late last month to the fact that the United States was experiencing its greatest inflation rate in 41 years, which resulted in the price of Bitcoin plummeting drastically to a level that was close to $19,000 on Wednesday. In a similar vein, cryptocurrency lender Celsius Network, which has been going through significant financial troubles, filed for bankruptcy protection under Chapter 11 that very same evening.
Despite the uncertainty, Bitcoin crossed back over the $20,000 threshold on Thursday, and is now trading at around $20,274 (as measured by CoinGecko).
But Michael Safai, founder and managing partner of Dexterity Capital, tells Fortune that "it's easier to fathom Bitcoin hitting $10,000 than $30,000," adding that "a lot of that will be dictated by the broader macroeconomic situation."
Sixty percent of the 950 people who took part in the most recent MLIV Pulse survey were in agreement when they stated that it is more likely that the price of Bitcoin will fall to $10,000 than it will rise back up to $30,000.
According to Safai, "further short-term weakness for Bitcoin, given the prospects of a recession; the impact that will have on stocks, which Bitcoin continues to track; and a relative absence of good news for crypto" resulted from the higher-than-expected Consumer Price Index (CPI) report and worries about a future rate hike. Both of these factors contributed to the decline in the price of Bitcoin.
Where stocks go, Bitcoin goes, according to Safai: "Crypto may not care as much about the Fed, but the stock market does."
This is a consensus amongst the field's leading experts.
Daniel Keller, co-founder of the Flux blockchain network protocol, sees a "deeper pullback" ahead for the cryptocurrency market. Anyone who is vulnerable to these markets should not take comfort in the high CPI and rising inflation pressure. Bitcoin has proven to be resilient, but when traditional markets react, "massive selloffs" are seen in the alternative market, he told Fortune.
In a recent interview with Fortune, the cryptocurrency economist of trading platform Trakx, Ryan Shea, stated that it is still too early to declare that the crypto winter is over.
The financial markets are unable to rely on the Federal Reserve to concede as quickly as they have in the past due to the current political climate.
Bitcoin will hit new all-time highs over next year: CoinShares' Meltem Demirors