Why Bitcoin Is Set to Break $74K Before Year’s End
In the year On August 5, during the global market crash, the price of Bitcoin fell by more than 25%. However, emerging signs suggest that this decline could be a bear trap, and prices could return to a new record high in 2024.
Bitcoin's downward momentum is weakening.
Bitcoin (BTC) price is showing signs of bullish divergence on weekly charts.
In particular, the price of BTC has hit new lows since July. On the other hand, the weekly Relative Strength Index (RSI) has made higher lows. This divergence indicates that the downward momentum is weakening, and a reversal to the upside is likely.
To avoid false signals, it is important to check bullish divergences with other technical indicators. So Bitcoin seems to have created a long-legged doji candle last week.
When this pattern appears after a strong trend (up or down), it may indicate that the trend may reverse or at least pause before continuing.
The formation of a doji candle, accompanied by an increase in trading volumes below Bitcoin's bullish flag pattern, indicates strong trader conviction for a price recovery. This suggests that Bitcoin may rally towards the flagging uptrend near $66,500 in September.
As bullish flags are typically bullish continuation patterns, a strong close above the flag's upper trend line can trigger a rally. The price may increase by an amount equal to the amount of the previous improvement before the formation of the flag.
In other words, bullish flags, doji candles and flash signals could help BTC price break above $79,000 – a new record in the coming months.
Bitcoin whales are flocking again.
Bitcoin's bullish reversal signals are getting further support from onchain data that track wealthy investors, also known as “whales”.
Bitcoin whales holding at least 1,000 BTC have spent the most bitcoin since 2015, the biggest increase in a decade, according to Glassnode. In the last 30 days, he left whale exchange balances of around 73,350 BTC.
The market interprets the higher volume of Bitcoin transactions as a great indicator considering that entities want to hold their BTC for a longer period of time rather than selling it for another crypto or fiat.
The last time Bitcoin Whales removed this many coins from the exchange was in 2015 when BTC was trading around $220. This was before the massive bull run that took the price of BTC to $20,000 in December 2017.
Bond traders are 100% certain about the September rate cut.
Macroeconomic indicators are fueling Bitcoin's bullish reversal view.
In the year CME data from August 12 showed 100% confidence that the US Federal Reserve will cut benchmark interest rates in September. The probability of a 25 basis point (bps) rate cut is 51.5%, compared to 15% a week ago. The rest expect a 50 bps slowdown, a bullish sign for Bitcoin.
All eyes on CPI data
This week is crucial for understanding the Fed's interest rate outlook, with July's US producer and consumer price reports to be released on August 14. Any increase in inflation could prevent Fed Chairman Jerome Powell from raising rates in September, creating downside risks for Bitcoin and the broader crypto market.
RELATED: Bitcoin Price Falls Below $59K As Institutions Stop Buying Stablecoins
The crypto market opened the weekly session with a tussle between bulls and bears indicating uncertainty over August 14 inflation data. The conflict was exacerbated by Fed Governor Michelle Bowman's hawkish comments that she would not support rate cuts at the September meeting.
“The progress made in reducing inflation in May and June is good, but inflation is still above the committee's 2% goal,” she said in an Aug. 10 speech to the Kansas Bankers Association in Colorado Springs.
“I remain cautious in my approach to considering adjustments to the current policy position.”
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
