Bitcoin’s Price Has Good Reasons to Explode Higher in Coming Weeks Along With Gold
- A short-lived rally or Bitcoin to continue to go up?
- ‘Awakening’ of Gold and a sizable 2H rally in S&P 500 good for BTC – Tom Lee
Bitcoin’s push above $10,000 this week is still going strong and had analyst and traders of Crypto Twitter turn bullish. We made as high as $10,850 but has now dropped to $10,600 level with 24 hours gains of 1.02%.
Bitcoin is trading in a narrow range between its 50 and 100-day moving averages, where the former is acting as a ceiling. A break above this key level could mean more gains ahead.
This has altcoins turning red with Cardano in the lead by 3.02%. However, a few are still enjoying the greens with Monero leading with 5.39% gains followed by Ethereum Classic’s 2.95%.
Institutions are interested
Last week, Bitcoin tumbled to almost $9,300 level with no apparent catalyst. But over the weekend price recovered.
However, according to Ed Moya, chief market strategist at Oanda Corp., this rally could be short-lived.
“Security vulnerabilities and stricter regulatory hurdles are likely to keep this rally short-lived,” he said. “We could see this rebound be temporary.”
This week the market got more good news in the form of VanEck and SolidX planning to issue shares in an ETF-like product — not an actual ETF, just another Grayscale’s Bitcoin Trust-like product — to qualified institutional investors.
“All the signs are there that institutions are interested, and this, to me, is part of that trend,” said Bloomberg Intelligence analyst Mike McGlone. “It looks like it could continue to go up and it’s got some good reasons.”
One is the long-awaited Bakkt’s physically delivered daily and monthly Bitcoin futures will be finally launched on September 23.
These good reasons also include Argentina introducing capital controls to put a stop to a slump in foreign-currency reserves and peso’s plunge.
Gold to Explode Higher in Coming Weeks, Bitcoin to Follow?
Amidst these macro disturbances, gold sees huge inflows as investors flock to safe haven assets.
The yellow metal hit a fresh six-year peak, which has been on a steady run up from $1,400 since August started, reflecting the fear that both the US and Chinese economies will slow down going into next year.
“The fact is that the [Federal Reserve’s rate-setting Federal Open Market Committee] is divided in terms of their next monetary policy move, while investors have already priced in another interest rate cut,” said Naeem Aslam, chief market analyst at TF Global Markets Ltd.
This means, gold can easily cross the $1,600 mark in the coming few weeks, he added.
However, it could mean good things for Bitcoin as well, according to Bitcoin Bull and Fundstrat’s Tom Lee.
Given the fact that Bitcoin has been “more comfortable as a ‘risk-on’ asset” for much of 2019,
“The ‘awakening’ of Gold is also arguably good for BTC,” Lee said.
In August we saw the correlation between digital gold and physical gold has about doubled in the past three months, going from 0.496, over the past year to 0.837.
Moreover, a “sizable 2H rally in S&P 500 should be very good for bitcoin,” he added.