Bitcoin is on the rise as of this writing, exhibiting bullish technical behavior but stabilizing beneath the August peaks. While there are areas of strength and an overall optimistic market sentiment, an analysis of the CoinMarketCap poll indicates that buyers need to enhance their actions.
Selling Bitcoin At $74,000 Could Lead To A “Disastrous” Outcome
A breakout above the resistance levels of $65,000 and $66,000 might stimulate a surge in demand, propelling the cryptocurrency towards all-time highs. However, resistance is expected at $70,000 and $72,000.
Should buyers take control and the coin retests its all-time high, one analyst on X cautions that selling at that price point could be a “disastrous” error. According to his analysis, exiting around $74,000 could be “far too premature” as the crypto asset may surge further.
From a technical standpoint, the cryptocurrency continues to operate within a bullish pattern. On the monthly chart, buyers are in command despite a pullback following the record high reached in March 2024. Notably, BTC prices are contained within a bullish flag. A closing price above the resistance trendline could initiate a breakout, confirming the gains projected for Q4 2023 and Q1 2024.
Although the technical candlestick configuration may favor bullish sentiment, fundamental aspects are vital from the analyst’s perspective. He argues that selling around $74,000 would be unwise, particularly as the People’s Bank of China (PBoC) is supporting the national economy by injecting liquidity.
China’s Liquidity Injection, Institutional Moves, And Policy Changes To Propel BTC Demand
The analyst highlights that the central bank has launched a 10-point easing initiative aimed at revitalizing the struggling Chinese economy. The decision to introduce liquidity and reduce interest rates could have a favorable global impact. With the rise in global liquidity, Bitcoin stands to gain from a more favorable monetary policy in China, Japan, and the United States.
Furthermore, Bitcoin may receive support from the declining USD index (DXY). As the US dollar weakens, other economies, particularly in Europe, may opt to further support their financial systems.
This shift could lead to an influx of capital into hard assets like Bitcoin. Already, gold prices are nearing historic highs, and Bitcoin may follow suit as investors turn to these assets to hedge against rising inflation.
The analyst also pointed out other significant developments, including the recent approval by the United States for BlackRock’s application to list and trade Options for IBIT, their spot Bitcoin ETF. Additionally, with banks like BNY Mellon expressing interest in Bitcoin custody services, it might signal a turning point for fund managers in accepting BTC for their clients.
Feature image from Canva, chart from TradingView
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