Bitcoin traders could be upbeat about what lies ahead. Nonetheless, the each day chart, the world’s Most worthy coin is struggling for momentum. BTC prices are inside a narrow range, with support at around $56,000 on the lower end and a stubborn liquidation level at $63,000.
Regardless that the uptrend stays, not less than considering the state of price motion previously few trading days, conservative and risk-on traders at the moment are on the sidelines.
It is simply when there’s a transparent trend definition, either below $50,000 or above $72,000, that traders can commit. The result will probably be an uptick in trading volume, currently muted and way below the averages recorded on August 8.
Is Bitcoin Preparing For A 5X Surge?
While there’s caution, one analyst, in a post on X, thinks Bitcoin could possibly be preparing for a significant leg up in the approaching sessions. Notably, the confident trader compares the present state of affairs to events of 2020 when the worldwide economy got here to a standstill attributable to the COVID-19 pandemic.
Governments needed to intervene through lockdown and rate of interest cuts, which fell to multi-year lows in the USA and globally.
The analyst says that, at spot rates, Bitcoin is precisely where it was in September 2020. Though prices temporarily fluctuated, it only took five short months for prices to expand from $10,500 to over $56,000.
Regardless that history may not repeat itself because it did in 2020, it may well rhyme. Due to this fact, there’s nothing, considering the present market conditions, that will prevent prices from rallying, even surging by 5X.
Interest Rates Cut And Politics As Key Drivers
Through 2020, the USA Federal Reserve slashed rates, meaning the accommodative monetary policy forced capital to Bitcoin, lifting prices to almost $70,000 in November 2021. Dropping rates of interest was a key driver of BTC demand.
Analysts expect the central bank to ease in September now that inflation continues to fall towards the benchmark 2% in the USA. This, in turn, creates a really favorable environment for protected havens, mainly Bitcoin.
Moreover, as politicians change their stance on crypto, endorsing the technology, the results of the November 2024 election will likely have a large bearing on the industry.
Kamala Harris and Donald Trump have already expressed plans to support crypto assets. Nonetheless, Trump has been more aggressive of the 2, saying his administration would even consider adding Bitcoin as a strategic asset, much like gold.
Feature image from Pexels, chart from TradingView