Bitcoin (Bitcoin) On Wednesday, the price rebounded by $36,000 before the opening of New York, as investors waited for the new inflation data in May and El Salvador Approved a bill This makes cryptocurrency the legal tender of the country.
The bottom of the bull market?
The benchmark cryptocurrency surged by 9.86% to an intraday high of $36,696, wiping out some of the losses from the previous trading day.In retrospect, the BTC/USD exchange rate has been Fell to nearly $31,000 On Tuesday, due to concerns that the currency pair has entered a bearish phase similar to 2018 after hitting around $65,000 in mid-April.
#Bitcoin On the chart: The key levels worth paying attention to are USD 30,000 and USD 47,000 respectively. Below USD 30,000 may further fall back to the historical high of approximately USD 20,000 at the end of 2017. A return to more than $47,000 will bring the focus back to the current all-time high. Bitcoin USD #encryption pic.twitter.com/X6d23G0FiH
— LMAX Group (@LMAX) May 25, 2021
On the other hand, the bulls continue to view Bitcoin as the main tool to fight inflation, according to Mike McGlone, senior commodity strategist at Bloomberg, Noting that cryptocurrency has the potential to reach $40,000 In the next meeting, higher than reached 20,000 USD. He says:
surrender? US$40,000 seems more likely than US$20,000-Bitcoin plummeted on June 8 and returned to the low-end support level of around US$30,000. It has many characteristics of extreme bearish sentiment, which is a typical feature of a longer bull market bottom. “
Great Central American Pump
Bitcoin has gained further upward momentum from El Salvador. Under the leadership of President Nayib Bukele, this Central American country became the first country to approve Bitcoin as its legal tender.
The law will come into effect within 90 days, enabling Salvadorans to use Bitcoin to pay for and receive goods and services. They will also be able to pay taxes in cryptocurrency.
Bukele also announced that El Salvador will use the country’s “volcanic energy” to mine Bitcoin.The announcement is a response to Tesla CEO Elon Musk Bitcoin payment suspension announcement On environmental issues. Musk’s decision triggered a serious FUD among investors, leading to a massive collapse in the cryptocurrency market.
Elon never expected his #Bitcoin Energy FUD will encounter volcanic energy hammer.
-Vijay Boyapati (real_vijay) June 9, 2021
Key future inflation data
Bitcoin’s latest upward movement also stems from technical support. Traders expressed their short-term bullish beliefs at around $31,000 because the cryptocurrency can hold $30,000 as support in recent history.
For example, on May 19, Bitcoin rose by more than 40% overnight after testing $30,000 as a lower price limit.
Yuriy Mazur, head of CEX.IO Broker’s data analysis department, pointed out that despite recent setbacks, BTC/USD may still remain at the level of around 30,000 US dollars as support. The senior analyst cited higher inflation behind his bullish analogy. He told Cointelegraph:
“In view of the current Bitcoin correction, the fact that analysts expect the U.S. CPI to rise to 4.7% may be an important factor in pushing BTC/USD higher. […] In the end, if inflation continues to rise, Bitcoin may become a big winner, which seems to be the case. “
Although worried that the Fed will eventually raise interest rates to bring Inflation rate reached its preferred target of 2%. US Treasury Secretary Janet Yellen further clarified Her interview with Bloomberg Higher interest rates will be a plus.
Higher interest rates tend to weaken investor interest in hedging assets such as Bitcoin and gold.
However, according to Yuriy, raising interest rates will not harm investor demand for Bitcoin, and pointed out that expensive loans will reverse the rise in the US stock market index. He added:
“If the Fed takes a strong stance on raising interest rates, it will slow inflation, but it will pose a considerable risk of a crash for the stock market because the value of loans to businesses will rise rapidly. In this case, Bitcoin may also attract more In times of high economic risk, funds are actually the last resort to protect their value, because more and more investors will look for safe havens to invest.”
US CPI data will be released on Thursday.