In the past couple of weeks Bitcoin price has struggled to achieve its pre-halving high of over $10,000 USD. Price behaviour for the pioneer cryptocurrency suggests a struggle to break out of the current channel within which it appears to be oscillating. For Bitcoin fans, there are signs that this breakout will lead to a significant upside movement. This is supported by a number of technical and fundamental factors.
Bitcoin Market Expectations
Ahead of the third halving in Bitcoin’s history, the expectations of a rally in price were high. Various indices within the ecosystem signified an increase in awareness and an influx of volume into the Bitcoin marketplace. Since the recent Bitcoin halving, not many of these expectations have been fulfilled. Considering the global events that happened in the same period of the last Bitcoin halving, many people expected Bitcoin to be playing a more significant role by now.
Expectations for Bitcoin and the cryptocurrency marketplace are still high. Older heads in the industry who seem to have a clearer understanding of the ecosystem insist that the significant days of Bitcoin are ahead of us. This belief, and many other indicators leave a positive vibe for Bitcoin and other viable cryptocurrencies in terms of future growth.
A Key Technical Indicator
One technical indicator that presents a classic setup for a breakout in Bitcoin price is the falling wedges. Currently, the Bitcoin price appears to be set in this position. An active trader who is popular for sharing his market opinion on twitter, “The Moon” suggests that the current setup suggests an upcoming price rally. According to his post on twitter, Bitcoin has a 68% chance of going up in price, as against a 32% chance of falling in price.
— The Moon (@TheMoonCarl) May 27, 2020
The US – China Trade War
Apart from studying chart patterns, global events and what is in the news always play significant roles in how the market unfolds. Therefore, the tension between the United States and China is expected to be having an impact on the market as well. With the possibility of sanctions on China by the United States, Chinese investors and those whose businesses are denominated in the Chinese Yuan are beginning to panic. Such a situation might lead to the search for a safe haven. This is where Bitcoin could play an important role.
Whenever sanctions are put in place, the native currency of the sanctioned region suffers. This is usually as a result of reduced trading activities across such a region. Demand for the native currency drops, leading to a consequent drop in value – a nightmare for investors. Already, the Chinese Yuan is at its weakest level since September 2019. One can only imagine what will happen if the tension continues to linger, or if sanctions are eventually put in place.
Actions of Central Banks
Another key factor that could see Bitcoin rising to more prominence is the arrival of the much talked about imminent global recession. This comes as a fallout of the ongoing global Covid-19 pandemic.
In order to fight the pandemic, national banks have gone ahead to print a lot of money in order to meet the needs of their people. This does not come without a future cost. The consequence of central banks being able to print and introduce new currencies into the system is definite inflation. This time around, many nations are already certain about going into a recession. This development is giving the people a lot of thoughts about how to preserve their wealth. Once again, Bitcoin presents itself as an ideal safe haven.
Therefore, there is the expectation that the demand for Bitcoin is about to grow in a significant volume. This is a sure and organic way for the cryptocurrency to acquire more value and increase in price. These factors and a few others have put investors and speculators in the cryptocurrency industry at alert. What happens in the coming days would most likely have a lot to say about the mid term future of Bitcoin.
For people who play active roles in the ecosystem, especially those who are interested in trading for the purpose of profit, this might be a time to pay close attention to the marketplace. Trading in the cryptocurrency market requires a lot of skill and knowledge, therefore it is advised that anyone going into the market carries out an independent analysis. This will help them in achieving a trading and investment system that suits their goals and purposes.
Iyke Aru is a seasoned author and educator in the blockchain and cryptocurrency industry. He has been in the business of crypto content writing for many years with thousands of his articles across several platforms on the internet. Iyke is based in Nigeria where he stands out as one of the most informed and credible figures in the cryptocurrency industry. Outside blockchain and crypto, you will most likely catch Iyke playing or discussing football with friends and family.