The Bitcoin BTC.X appears to have finally bottomed, ending 2 months of declines. The price of the pioneer cryptocurrency plummeted to trade at about $57,800 between early May and the end of June, but has since rallied to trade above $66,000.
The BTC/USD price’s current bullish momentum is also supported by a variety of data items, with retail traders in particular buoyed in the early stages of the second half of the year. According to Bitcoin price and open orders data from CFD trading platform Capital.com, more than 83% of traders on the platform had buy open positions versus about 16% who had sell open positions as of this writing on Thursday.
Source: Capital.com Bitcoin price and seller/buyer distribution stats.
This indicates how bullishly biased the market is following Bitcoin’s latest rebound. However, for the momentum to continue, the price of the pioneer cryptocurrency will need more than just retail sentiment.
The CLARITY Act Impact
The US Digital Asset Market Clarity Act, “CLARITY Act”, seeks to provide clearer rules and more legal certainty for crypto markets. Although currently facing ‘a government ethics hurdle’, progress is being made following Trump’s meeting with Senators.
Bitcoin is treated as a commodity in the US regulatory framework, which means the world’s largest cryptocurrency is not currently negatively affected by the market's current “unclarified” state.
However, there is uncertainty regarding crypto exchange platforms and custody of digital assets, which affects the market overall, and that is bound to have some impact on Bitcoin. Therefore, when the CLARITY Act is passed, Bitcoin could benefit from the ripple effect of the overall crypto market, further bolstering its performance.
US Macroeconomic Data and Fed Rate Decision
The BTC/USD price could also benefit from the continuing favorable outlook in US interest rates, coupled with weakening jobs numbers, which have lowered fears of a potential rate hike. This has increased demand for risk assets like cryptocurrencies, led by Bitcoin.
Essentially, there is a broad view that it is not going to get more expensive to fund investments, and this makes high-risk, high-reward assets more attractive.
Technical Analysis
Technically, BTC/USD continues to trade slightly below the 100-day moving average line, despite the latest rebound. This leaves some room before facing resistance from the key indicator.
The 14-hour RSI also has room left to run before entering overbought conditions, which implies bullish momentum could continue for the foreseeable future before triggering a supply/demand imbalance.
Therefore, traders can target extended gains with profit opportunities above $70,000, or even higher into the low $80,000s.
However, in the event of an immediate pullback at around $66,000/$67,000, as was the case in mid-June, traders can watch out for a rebound at just below $58,000.
Conclusion
The bitcoin price appears to have finally established a bottom around $57,000/$58,000 amid the latest rebound. However, unlike previously, the price of the pioneer cryptocurrency could this time be boosted by the highly anticipated passage before the US Senate recess on August 11.
The latest draft’s chances of passing have been heightened by President Trump’s recent meeting with Senators to resolve areas of the bill that have been a matter of debate.
Comments
Log in or sign up to join the conversation.