As a seasoned researcher with over two decades of experience in financial markets, I have witnessed numerous market cycles and trends, but none quite like this one involving Bitcoin (BTC). The recent weekly close at $69,000 and the continued institutional buying are truly remarkable developments that hint at an even brighter future for BTC.
Last week’s Bitcoin (BTC) closing price reached $69,000, surpassing the upper limit of its bullish pattern (bull flag), and almost matching the peak from the previous bull market in November 2021. This strong close might encourage the ‘bulls’ (optimistic investors) to drive up the Bitcoin price further throughout this week.
Huge institutional buying of $BTC continues
As a crypto investor, I’m excited about the rising demand for Bitcoin as we approach the end of the year. The market seems to be pointing towards significantly increased BTC prices, which is particularly promising given the U.S. Federal Reserve’s plans for additional interest rate reductions.
It seems that this surge in demand for U.S. Spot Bitcoin ETFs is primarily driven by institutional purchases, and these last six trading days have witnessed an overwhelming influx. The combined net investment during this period amounts to approximately 36,580 Bitcoins, which is equivalent to over $2.5 billion.
Ban or tax Bitcoin?
In summary, a new research paper has been released by the Federal Reserve Bank of Minneapolis and the University of Minnesota, advocating that either a prohibition or a taxation policy should be implemented on Bitcoin by U.S. regulators.
According to the researchers, it’s proposed that the U.S. administration should maintain a “persistent budget surplus” instead of a deficit. However, they suggest that this can only occur when financial markets are not fully developed (incomplete) and consumers exhibit caution towards risk.
The paper explains that Bitcoin complicates this strategy, and although the authors are contemptuous of Bitcoin, in that they state in the paper that it is a “useless piece of paper”, they also argue that its presence forces the government to balance its budget.
Short term roll over of $BTC price
Looking at short-term Bitcoin prices, it appears that $BTC has begun a downward trend after reaching $69,500. If this trend continues into a minor correction, the Fibonacci level of 0.236 is found just beneath at approximately $67,000. However, if the price dips further, it could validate the top trendline of the bull flag pattern. This aligns with the 0.382 Fibonacci level, and a rebound from this point would suggest a very optimistic outlook for Bitcoin prices.
If the price trend continues as expected, it will cause a reset of the Short-Term Stochastic RSIs to their lowest point. This reset could trigger an upward momentum in the price once it starts rising again.
Encouraging macro picture for $BTC
The weekly chart presents an optimistic view for Bitcoin. At the moment, the price is perched on a robust horizontal support level at approximately $68,300. If the price were to dip beneath this point, there are two other potential supports: one is the horizontal line at around $66,600, and the other is the top of the bullish flag formation.
As you move towards the base of the graph, the Stochastic RSI shows a pleasant upward slope, whereas it appears that the RSI at the bottom might be transitioning from its downward trajectory.
If Republican presidential candidate Donald Trump manages to further distance himself from Democrat Kamala Harris in the upcoming U.S. elections within the next fortnight, it might trigger some exciting Bitcoin price movements as we approach the end of the year.
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2024-10-21 13:07