After over a month of relatively flat price action, bitcoin is stirring this week. The leading digital asset has crossed above $9,500, lightly breaking the upper barrier of the wedge.
“As a matter of perspective, it can probably be seen that this entire period was actually a consolidation, in which bitcoin fell at the same pace as the U.S. Dollar, because as we know, the greenback is now falling fast, especially when measured against other financial assets like stocks,” wrote analyst Mati Greenspan in his daily newsletter Quantum Economics.
But we are still not out of danger given that $9k and $10,000 are the hard psychological barriers. Also, given that stocks are not far from their all-time high and many are calling out the top, the downside is considerable that could again push BTC down.
However, the fundamentals remain on bitcoin’s side. As Ki Young-Ju, the CEO of market research firm CryptoQuant points out, miners are not selling based on their outflows, no significant BTC exchange inflows from whales so far, and all exchanges' reserve has hit the year-low a month ago and keeps that low.
The digital asset just needs one good strong push for it to make new yearly highs and then off to make a new ATH of $20,000.
This week, Bitcoin enjoyed bullish news in the form of US regulators, giving banks a green light to hold cryptos for their customers, which could be “insanely bullish” for the digital asset. The latest pro-crypto nominee for the Fed governor is another fuel for the bitcoin run.
The macro-environment of virtually zero interest rates, Fed discussing another stimulus package, US-China conflict, worries over increasing inflation, and currency debasement is good tailwinds for BTC.
These factors have already driven spot gold prices to $1,905, just 0.7% away from its all-time high. Even Silver is shining bright, which is “closing in on its best week in 40 years yet chart below suggests a bull market in its very infancy.”
Tesla CEO Elon Musk, who has shown interest in bitcoin and cryptocurrencies, especially Dogecoin, however, is not in favor of another government stimulus package. “If we do a stimulus at all, it should just be direct payments to consumers,” he said.
Another government stimulus package is not in the best interests of the people imo
— Elon Musk 🌹 (@elonmusk) July 24, 2020
Bitcoin just might be embarking on its bull journey with the new greens as historically it has been seen, post having consolidation last for weeks leading to an uptrend.
“The recent breakout comes after a series of Higher Lows within a multi-week $9000-$9300 range. Price lately reached the top of the Weekly $8700-$9700 range,” noted analyst Rekt Capital.
“BTC has been in this main range for 13 weeks (10 of those weeks coming after the Halving),” he added.
If we look at the last halving, this was around when ten weeks after the block subsidy event that bitcoin started moving.
The 2016 halving led to more than 3,000% gains in about 525 days. By this standard, in 2020, Bitcoin is “just getting started”