A four-day winning streak brought Bitcoin (BTC) prices closer to testing their 50-day exponential moving average (~ $ 35,115) as resistance.
The wave that was instrumental in bolstering Bitcoin’s bullish bias as support in 2020 turned into resistance during the May 2021 sell-off. In this way, the cryptocurrency was prevented from expanding its upward movements many times over.
For example, Bitcoin’s decline from $ 56,900 to $ 30,000 in mid-May prompted the bulls to buy the dip. As a result, the cryptocurrency shot back above the $ 40,000 mark but found its bullish momentum exhausted near the 50-day EMA. The scenario was repeated several times after the retracement attempt in May, as shown in the following chart.
Rekt Capital, a noted cryptocurrency analyst, turned to a 2020 fractal to determine potential outcomes from the ongoing Bitcoin price action.
The trader noted that bitcoin price tested the 50-day EMA as resistance last October when the BTC / USD pair traded just below $ 10,000. But after the BTC / USD wave broke up, it eventually hit a record high of $ 65,000.
“This [was] when BTC formed an almost identical fractal to the current price movement of Bitcoin, ”noted the profile, suggesting that the fractal could repeat itself as Bitcoin tests the same level of resistance after nine months.
Bitcoin joined in to reclaim the 50-day EMA after a rosy week.
The benchmark cryptocurrency was up more than 8% by the end of the seven-day session. Much of the profits came after the B-Word conference, which featured a trio of Wall Street greats – Tesla CEO Elon Musk, Twitter CEO Jack Dorsey, and Ark Invest founder Cathie Wood. Executives took turns speaking positively about Bitcoin technology and sharing their thoughts on the future.
Musk, whose cryptocurrency comments are notorious for moving markets, revealed that his private rocket company SpaceX holds Bitcoin. He added that Tesla will resume its Bitcoin payment option once its miners switch to more renewable energy sources to power its blockchain.
Dollars, stocks, and the Fed
Bitcoin also appeared to have benefited from risk-on-flows led by a troubled US dollar index and a rising Wall Street.
The next week seems to be busy with high-profile data and policy statement releases.
On Tuesday, the U.S. Conference Board’s consumer confidence index for July. In addition, a preliminary report on the University of Michigan Consumer Sentiment Index shows a negative change in consumer sentiment. The report also expresses fears of a sharp rise in inflation.
Recently, inflationary pressures have made the dollar more attractive to investors. This has undermined Bitcoin’s preliminary bullish outlook despite the popular safe-haven narrative of the cryptocurrency.
On Wednesday the Federal Reserve Open Market Committee (FOMC) will announce its rate decision and publish its monetary policy statement.
Federal Reserve chairman Jerome Powell said earlier this month in a testimony to Congress that they were still far from completing their $ 120 billion monthly bond purchase program. He commented on a decision to roll back the Fed’s asset purchases would only be hit if there was a significant improvement in the labor market.
However, US Federal Reserve officials expect to discuss whether they could start tapering by the end of this year. More specifically, a restrictive shift in Fed policy in June was partly responsible for pushing Bitcoin prices down and the dollar higher. Hence, Bitcoin bulls would expect to remain cautious about the possible outcome of the FOMC meeting.
Similar: Bitcoin bull outlines 7 steps to more fiscal incentives and higher BTC prices
On the flip side, given the mounting economic uncertainties caused by the rapidly spreading delta variant of Covid-19, the Fed could detract from the attractiveness of the dollar and, in turn, provide some degree if the Fed chooses to do so over the Tapering talks to sleep the upward thrust for Bitcoin.
Do you think about thinking?
Instead of thinking about curbing the Fed with $ 120 billion in monthly QE, it added $ 162 billion to its balance sheet in the first three weeks of July.
Record high balance sheet = record high S&P 500.
Every month since November. Like clockwork. pic.twitter.com/UIhzWCnid5
– Sven Henrich (@NorthmanTrader) July 24, 2021
On Thursday, the US Bureau of Economic Analysis published its gross domestic product growth estimate for the second quarter. Economists expect an improvement from 6.4% to 7.9% year-on-year.
Finally, Friday’s US economic list will include personal consumption expenditure (PCE), the Fed’s preferred metric for measuring inflation; it is expected to rise 3.7% in July from 3.4% in June.
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