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Bitcoin (BTC) hit its highest level in more than two months just days away from the July inflation report.
The highest cryptocurrency climbed 1.65% to $ 45,363 on August 8, continuing the bullish momentum that has already seen it jump 21.62% from its August 5 low of 37,300. $.
Momentum has also been strong among Bitcoin’s rivals. Ether (ETH), the second largest crypto by market cap, rose 29.78% from its August 3 low of $ 2,630, topping $ 3,100 on Sunday. Its gains came after the Ethereum hard fork went live in London on August 5, which should add deflationary pressure to ETH’s supply.
July Inflation Report, online
On Wednesday, August 11, the US Bureau of Labor Statistics will release the July inflation report, with markets forecasting a peak of 0.5%. The projections come after the consumer price index (CPI) jumped to 5.4% year-on-year in June to register its biggest increase in 13 years.
Bitcoin bulls have responded positively to recent inflation reports. They effectively kept the cryptocurrency from dropping below $ 30,000 after the crash on May 19. Meanwhile, their recent efforts to push prices above $ 40,000, ultimately leading to a slow break up above $ 45,000, indicate strong demand for Bitcoin, which appears to be emerging from its summer slump. .
Lex Moskovski, chief investment officer at Moskovski Capital, highlighted a Glassnode chart that showed dramatic spikes in entities entering the Bitcoin network, matching the growth with rising BTC / USD rates.
“The number of new Bitcoin entities continues to reach an all time high”, Moskovsky tweeted.
Additionally, on-chain analyst Willy Woo said the ongoing Bitcoin momentum is expected to push its prices above $ 50,000, citing an imbalance between supply and demand in the market. He said all cohorts of investors were buying Bitcoin, resulting in a supply shock.
Related: Here’s What Traders Now Expect As Ethereum Price To Reach $ 3,000
Woo referred to a chart he released on July 15 when the Bitcoin market corrected lower after peaking at $ 36,675 in the session. The chart, as shown below, has highlighted Bitcoin liquidity shock events across all exchanges and their relationship to prices.
Woo explained:
“Fundamentals don’t predict price in the short term, but with enough time, price discovery reverts to fundamentals. [The] the exact value is $ 53.2,000 today, with a standard deviation band between $ 39.6,000 and $ 66.8,000 (68.5% confidence). “
Bearish fractal
However, Bitcoin’s latest ascent carries risks of becoming a dead cat rebound based on previous top-to-bottom Fibonacci retracement fractals.
After hitting record highs, Bitcoin tends to correct towards its 200 week exponential moving average (200 week EMA; the yellow wave), where it ends up bottoming to continue another bullish cycle.
In the last two events, the BTC / USD exchange rate has shown false rally rebounds after testing the 23.6 Fib line as support. These bullish moves failed to turn into big bullish momentum after facing resistance at higher Fib levels.
Related: 3 Reasons Ethereum Is Unlikely To Return Bitcoin Anytime Soon
For example, in 2019, Bitcoin rebounded over 50% after bouncing off its 23.6 Fib line to nearly $ 7,357. But the cryptocurrency faced extreme selling pressure near its 61.8 Fib line of $ 10,613. Eventually, it resumed its downtrend and collapsed to $ 3,858 in March 2020.
If the fractal repeats, Bitcoin could face extreme resistance at the 61.8 Fib level at $ 46,792 and correct lower to retest its 200-day EMA, which currently sits below $ 20,000.
Market commentator and independent trader Keith Wareing has suggested that an impending bullish cross between Bitcoin’s two weekly moving averages points to the start of a multi-month bull run. Dubbed MACD, the indicator was instrumental in predicting the 2020 bull run.
“The weekly MACD should cross bullish on Bitcoin after tonight’s close”, nodded Wareing to its supporters with the price of Bitcoin so far holding above $ 44,500 at the time of writing.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move comes with risk, you should do your own research before making a decision.
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