This week, the price of Bitcoin dipped from its record peak of $108,200 to below $95,000, as ongoing worries about the bond market continued to cast a shadow.
On Tuesday, the value of Bitcoin (BTC) fell significantly due to a surge in U.S. bond yields, which reached their highest point in more than two years. This rise occurred as a result of robust employment openings data reported in the United States.
On Wednesday, the decline in the bond market persisted, causing the yields on 30-year and 10-year bonds to reach 4.95% and 4.70%. This increase in yields implies that investors anticipate the Federal Reserve will keep its aggressive stance towards monetary policy for the remainder of the year.
The upcoming release of Federal Reserve minutes on Wednesday and nonfarm payroll numbers on Friday is anticipated to cause additional effects on the bond market. These documents could offer further understanding about the Fed’s latest meeting and potential indications regarding future monetary strategies. As reported by Petr Kozyakov, CEO of Mercuryo, in a note sent to crypto.news on January 8th:
The enthusiasm surrounding bitcoin’s entry into a new era where even the United States Central Bank might maintain a Strategic Bitcoin Reserve appears to have subsided. Instead, Bitcoin is back in its role as a high-risk investment, with indications that the U.S Federal Reserve might hold interest rates at higher levels for a longer period than initially anticipated.
Analysts are suggesting that bond yields might keep rising because of ongoing inflationary pressures caused by policies during Donald Trump’s presidency, such as deportations, tariffs, and tax cuts. In a recent statement, Mark Zandi, Moody’s Chief Economist, has alerted us that these increasing yields could potentially impact both the stock market and cryptocurrencies.
Despite the possibility of short-term turbulence caused by bond market issues, renowned trader Peter Brandt maintains a positive stance on Bitcoin’s future prospects. He also pointed out an emerging head-and-shoulders pattern in Bitcoin, suggesting potential price swings ahead.
Charts are constantly changing, which means we should always be cautious about relying on any specific pattern. For instance, intraday charts evolve into daily charts, then weekly charts, and eventually into monthly trends – it’s all about finding the right chart that works effectively. In the case of Bitcoin ($BTC), while the major trend remains bullish, a Head and Shoulders top is forming on the daily chart, indicating a potential reversal.
— Peter Brandt (@PeterLBrandt) January 8, 2025
Weekly chart points to more Bitcoin price gains
In the upcoming weeks, the trend on the weekly chart suggests that Bitcoin could experience further growth. This is indicated by a cup-and-handle pattern, which is a commonly recognized bullish formation signaling continuation. Bitcoin surpassed the handle part of this pattern back in November, reaching an all-time high of $108,200 in December.
Right now, Bitcoin is showing signs of a bullish “pennant” formation close to the significant resistance level of $100,000. These types of consolidations often occur before significant price increases. The pennant shape is created by a long upward trend followed by a triangle pattern, suggesting a possible breakout could be imminent.
The price of Bitcoin continues to stay over its 50-day moving average, suggesting that it could potentially experience a robust upward trend in the coming weeks, indicating a powerful bullish surge.
As an analyst, I’m anticipating a significant surge in the market over the coming weeks, potentially preceding Donald Trump’s inauguration on January 20th. If this anticipated surge materializes, the level to keep a close eye on would be $122,000. This projection is derived from estimating the depth of the current market ‘cup’ formation and projecting it upward from the expected breakout point.
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2025-01-08 18:54