Why did the price of Bitcoin rise today?
Bitcoin (BTC) pared the best part of its weekly losses on July 26 as traders braced for Donald Trump's keynote speech at the Bitcoin 2024 conference in Nashville, awaiting key US inflation data for a hint on when to cut interest rates.
Traders are cheering for former President Donald Trump's keynote address at the Bitcoin 2024 conference in Nashville on July 27. They also await key US inflation data to gain insight into the Federal Reserve's timetable for interest rate cuts.
Trump May Announce Strategic Bitcoin Reserve Policy
Bitcoin price rose 2.56% to $67,480 on July 26, recovering 6.40% from the weekly low of $64,425 established a day earlier. The rebound came hours before Trump was scheduled to speak at the Bitcoin 2024 conference.
Social media speculates that if he wins the election in November, Trump may promise to establish a bitcoin reserve policy in the US. The possibility of the world's leading economy becoming a buyer of Bitcoin is boosting market sentiment.
“No one wants to short Bitcoin into the weekend,” added Marcus Thielen, CEO of 10x Research.
“He's looking at the powerful crypto lobby that raised $150 million for the Crypto Super PAC.”
After the July 13 assassination attempt on Trump, the price of Bitcoin increased by more than 16.50%, raising the possibility of his victory in the upcoming election.
U.S. headline inflation data may increase the chances of a rate cut.
Today's bitcoin gains come hours ahead of the release of US personal consumption expenditures (PCE) data, the Fed's preferred measure of inflation.
The core PCE price index, which excludes volatile food and energy prices, is expected to rise 0.1% in June from May's increase. Annually, the PCE price index is forecast to grow by 2.5 percent, down from the previous 2.6 percent but still above the Fed's 2 percent target.
These expected figures are in line with recent comments from Fed Chairman Jerome Powell, whose dovish stance has bolstered expectations for two interest rate cuts by the end of the year.
Traders are now raising prices by 25 basis points (bps) in September and gradually increasing bets on the same move in December. Low rates abound for illiquid assets like stocks and crypto, a major factor in Bitcoin's recovery on July 26.
The price of BTC is rising from the average support
Daily price chart techniques show that BTC price has bounced back after testing the 50-day exponential moving average (50-day EMA; red wave) as support. This wave support has bought BTC's downside tests several times in recent history.
In the year Since July 26, BTC price has been trending higher in a descending channel pattern with distribution. This bullish target is around $68,350, a roughly 2.50% upside from current price levels.
Interestingly, a climb to $68,350 could bring a classic inverse-head-and-shoulders (IH&S) setup into play, which could lead to further BTC gains in August.
The IH&S design is characterized by three troughs, the middle trough, called the head, with the other two deeper, called the shoulders. These pools have a common barrier called the neckline. As a rule, the IH&S pattern is resolved when the price decisively breaks above the neckline.
Traders measure the IH&S breakout target by measuring the maximum distance between the deepest point of the head and the neckline and adding the result to the neckline level. Applying the same to the BTC chart would bring the target to $87,440 at the end of October.
Related: Bitcoin Traders Warn BTC Price Could Still Fall To $62K Or ‘Even Lower'
Conversely, a pullback from the neckline—that is, a pullback from the uptrend of the downtrend channel—can undermine the bullish position. Instead, the price may drop to the lower trendline of the channel, which was below $60,000 in August.
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.
