Bitcoin’s $100K Myth. Is It Still Attainable?
Bearish Momentum Starting to Fade. Are the Bulls Gearing Up for A Comeback?
Bitcoin’s $100,000 price tag has been somewhat of a myth among investors, traders, and crypto enthusiasts in general. In mid-March, when the apex cryptocurrency hit almost $74,000, this myth was closer than ever to becoming reality.
But as of writing, BTC is changing hands at $64,600 and has been lacking oomph for a few months now. It is now closer to $50,000 than $100,000 so the myth is fading into mist as we speak. But there’s still hope. Recently, Bitcoin futures Open Interest (OI) increased by $2.02 billion over three days, signalling strong buying interest. Usually, higher OI means that the price is about to go up.
Investors are expecting two US Federal Reserve rate cuts by year-end, which played a big role in this OI uptick. Investor sentiment is heavily influenced by the Federal Reserve’s monetary policy and a Reuters poll suggests a possible rate cut in September. However, there is no certainty, and rate cuts could be postponed, which would negatively affect Bitcoin.
Fed Chair Powell adopted a cautious stance during his latest press conference and emphasized a data-dependent approach. The Consumer Price Index (CPI) rose by 3.3% over the past year, while the Core CPI climbed by 3.9%. Additionally, the Producer Price Index (PPI) exceeded expectations with a 2.2% annual increase. In other words, inflation is still lingering and this may deter aggressive rate cuts.
Other Factors That Can Determine the Next Move
Historically, Bitcoin and traditional markets have moved in tandem and right now, the SP500 is at a record high. It’s bullish, but it’s also prone to a potential market correction. A downturn in traditional markets could negatively impact Bitcoin’s price.
Institutional interest also plays a crucial role in Bitcoin’s trajectory. The approval of Bitcoin exchange-traded funds (ETFs) by the SEC has been a significant catalyst. Moreover, the anticipated approval of Ethereum ETFs by major financial institutions later this year could further boost prices.
So, can Bitcoin walk the path to $100,000? Maybe, but it will be influenced by various factors, including Federal Reserve policies, inflation, and institutional interest. It remains an achievable milestone but don’t hold your breath.
Chart Analysis – BTC/USD
After the double top at $71,500, the bears took control of the pair and it looks like they are not relinquishing it very soon. There was also bearish divergence at that double top, so the writing was on the wall.
The pair has recently broken below the 50-day Moving Average, which is of course another bearish sign but the momentum is starting to die off. The candles are very small, with long wicks and the price is approaching the support at $63,600.
This support hasn’t been a crucial hurdle in the past but it is still an important point, where a bounce may occur. Considering how the price is behaving, a big move is coming but beware: it could happen to either side.
