Bitcoin Price On Its Way to Recovering, Similar Situation Paved a Way to Its $20k Price
Coinspeaker
Bitcoin Price On Its Way to Recovering, Similar Situation Paved a Way to Its $20k Price
Even though yesterday Bitcoin passed its psychological level of $10k, it seems that it is still too early to celebrate. The price tested again the $10,200 resistance area and it is currently correcting lower. However, at the time of writing the price went up again for 2.23% to $9,981.72. And while a negative monthly close looks likely, the long-term outlook will remain bullish as long as prices are held above the 200-day moving average (MA), currently at $6,417.
Also, despite the monthly loss, the bullish structure on the long-term chart remains intact. Let’s just remember that a similar bearish channel breakout in the final quarter of 2015 paved way for a record rally to $20,000.
A lot of crypto analysts have still a pretty bearish outlook on the market’s short-term trend, because of unwanted inspections and surveys from the U.S. government led by the hype over the introduction of Facebook’s Libra.
FED Cuts Affect Bitcoin Price?
eToro analyst Simon Peters explained that yesterday’s minimal move upwards is just that – “a mini bump”. However, he admits that came pretty unexpected after U.S. Senator Mike Crapo confirmed that it would be pretty hard or even impossible to ban Bitcoin in the United States.
Peters said he was being optimistic that there will be a stronger reaction after Federal Reserve’s decision to reduce its benchmark interest rate by one quarter percentage point. This would be only the fifth time in the past 25 years that the central bank switched from raising to lowering rates.
Senior eToro analyst Mati Greenspan agrees, saying that the imminent FED cut comes as a result of pressure received from Trump himself and also the need for lowering interest rates in order to regulate the economy in whole.
This connection is, according to Greenspan, pretty much simple to understand. A cut in interest rates ultimately encourages big business owners to borrow funds used to invest in businesses which in turn affects the larger population, increasing the rate of flow and availability of money.
Bear in mind that even though recent Trump tweets are all about his dislike for Bitcoin, this has been seen as a huge chance for more people to learn about the value of the peer-to-peer digital cash system.
On the other hand, economist and crypto investor Alex Kruger commented on burying investors during yesterday’s Federal Open Market Committee meeting tweeting:
Let's recall the last time $BTC reacted to an FOMC decision.
……
That's right, NEVER.
Many crypto traders now live in an imaginary alternative reality.
— Alex Krüger (@krugermacro) July 31, 2019
He went on further explaining:
A picture is worth a thousand words.
Contrast how differently $BTC and gold react to the FOMC.
Gold displays considerable above average volatility, while $BTC barely reacts, and has been known to move a meager 2 ticks the following minute. $BTC may even move *the other way*. pic.twitter.com/VMNSCSQWNL
— Alex Krüger (@krugermacro) July 31, 2019
A few days ago, Peter Tchir, former Executive Director at Deutsche Bank, said Bitcoin is an indicator of hidden geopolitical tensions, pointing to the coin’s momentous performance in May this year when the U.S. – China trade war started.
Morgan Creek Digital Assets co-founder Anthony Pompliano also commented recently that the first country, which will embrace Bitcoin in a “very serious way,” will force others to play catch up based on game theory.
He also commented FED cuts saying:
BREAKING: The Federal Reserve has cut interest rates by 0.25%
This is step one of pouring rocket fuel on Bitcoin
— Pomp (@APompliano) July 31, 2019
The truth is, low interest rates are designed to encourage spending and investing, not saving – because saving means you’re losing money. Bitcoin, on the other hand, is totally different. It rewards saving because its supply cannot be weakened. No central authority can devalue Bitcoin because its value is solely determined by demand. Over the long-term, this has played out in a steadily rising return for Bitcoin holders.
Be it as it may, the Bitcoin price is moving upwards. One of the possibilities lays for sure in the fact that yesterday Bitcoin derivatives provider LedgerX announced they launched the first physically-settled Bitcoin futures contracts in the U.S. The contracts, which pay traders out in Bitcoin, will be available to both institutional and retail investors. By launching it LedgerX beat its competitors Intercontinental Exchange’s Bakkt and TD Ameritrade-backed ErisX in doing the same.
Bitcoin Price On Its Way to Recovering, Similar Situation Paved a Way to Its $20k Price
OhNoCrypto
via https://www.ohnocrypto.com
Teuta Franjkovic, Khareem Sudlow
