Four consecutive days of rising has brought Bitcoin (Bitcoin) The price is close to testing its 50-day exponential moving average (~35,115 USD) as resistance.
This wave helped strengthen Bitcoin’s bullish bias in 2020 as support, but turned into resistance during the May 2021 sell-off. In doing so, it restricts the cryptocurrency from expanding its upward rebound multiple times.
For example, Bitcoin’s Decreased from US$56,900 to US$30,000 Mid-May prompted the bulls to buy on dips. As a result, the cryptocurrency recovered above $40,000, but it was found that its bullish momentum was exhausting near the 50-day moving average. After the May retracement attempt, this situation was repeated several times, as shown in the figure below.
Rekt Capital, a well-known cryptocurrency analyst, Become a fractal in 2020 Determine the potential outcome of ongoing Bitcoin price movements.
The trader pointed out that the Bitcoin price tested the 50-day moving average as a resistance level in October last year, when the BTC/USD pair was trading below $10,000. But after breaking the upward wave, BTC/USD finally reached a record high near 65,000 USD.
“This [was] When BTC forms a fractal that is almost the same as the current price trend of Bitcoin,” the introduction pointed out, implying that the fractal may be repeated because Bitcoin is testing the same resistance level 9 months later.
After portraying a good week, Bitcoin recovered its 50-day moving average.
The benchmark cryptocurrency rose by more than 8% at the end of the 7-day trading day. Most of its proceeds came from the B-Word conference, which was composed of three Wall Street figures-Tesla CEO Elon Musk, Twitter CEO Jack Dorsey, and Ark Investment Company founder Cathy Wood. Executives took turns talking about Bitcoin technology and sharing their views on the future.
Musk’s comments on cryptocurrencies are notorious for driving the market, disclose His private rocket company SpaceX holds Bitcoin. He also added that once its miners switch to more renewable energy to operate its blockchain, Tesla will restore its Bitcoin payment option.
U.S. dollar, stocks and the Federal Reserve
Bitcoin also seems to take advantage of the risk flow led by the volatile U.S. dollar index and rising Wall Street.
The next week seems to be busy releasing high-profile data and policy statements.
On Tuesday, the US Counselor will release the consumer confidence index for July. In addition, the University of Michigan’s preliminary consumer confidence index report showed negative changes in consumer confidence. The report also expressed concerns about the sharp rise in inflation.
Recently, inflationary pressures Enhance the attractiveness of the U.S. dollar Among investors. Despite the popularity of cryptocurrencies as a safe-haven argument, this weakens Bitcoin’s medium-term bullish outlook.
On Wednesday, the Federal Open Market Committee (FOMC) will announce the interest rate decision and issue a monetary policy statement.
Federal Reserve Chairman Jerome Powell, Said in testimony to Congress Earlier this month, they were still staying away from the bond purchase plan of reducing $120B per month. He commented that only after seeing a substantial improvement in the labor market will he decide to reduce the Fed’s asset purchases.
However, U.S. central bank officials are expected to discuss whether they can start scaling down before the end of this year. Specifically, the Fed’s June policy shift was partly responsible for pushing down the price of Bitcoin and pushing up the U.S. dollar. Therefore, Bitcoin bulls are expected to remain cautious about the potential outcome of the FOMC meeting.
On the other hand, considering that the rapid spread of Covid-19’s Delta variant has led to rising economic uncertainty, if the Fed decides to sleep on dwindling conversations, this may hinder the attractiveness of the U.S. dollar and provide it to a certain extent. The upward momentum of Bitcoin.
Thinking about it?
Rather than considering shrinking the Federal Reserve, QE runs $120B per month, which actually expanded its balance sheet by $162B in the first three weeks of July.
Record high balance sheet = record S&P 500 index.
Starting from November, every month. regular. pic.twitter.com/UIhzWCnid5
-Sven Henrich (@NorthmanTrader) July 24, 2021
On Thursday, the U.S. Bureau of Economic Analysis will release its estimate of GDP growth in the second quarter.economist Expect it to improve A year-on-year increase of 6.4% to 7.9%.
Finally, on Friday, the U.S. Economic Summary will announce personal consumption expenditures (PCE), which is the Fed’s preferred indicator for measuring inflation; this is Expected to rise It was 3.7% in July and 3.4% in June.
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