The Bitcoin mining hashrate, a leading indicator for bitcoin rallies, has improved, one observer said, explaining the bullish outlook.
Analysts are growing optimistic about bitcoin's (BTC) price prospects after a rebound toward a crucial resistance level that capped gains earlier this week.
Since testing the 50-day simple moving average support near $63,500, the leading cryptocurrency has bounced sharply to breach $67,000, CoinDesk data show, and is closing on a resistance line identified by the trendline connecting March and April highs. The so-called descending trendline proved a tough nut to crack on Monday – as well as when it last came into focus in May – becoming a level to beat for the bulls.
That might happen soon, if the mood among analysts is a guide.
One trigger could be the U.S. core personal consumption expenditures (PCE) price index, the Federal Reserve's preferred inflation measure, scheduled for release at 12:30 UTC (08:30 ET). Another is Republican presidential candidate Donald Trump's impending speech at the Bitcoin conference in Nashville.
"Incoming PCE data could be the final nail in the coffin for high interest rates and lead to imminent rate cut announcements, while Trump’s speech at the Bitcoin conference could start a stronger rally if rumours of an announcement of a national strategic reserve for BTC come true," Valentin Fournier, an analyst at digital assets analyst at advisory firm BRN, said in an email.
These factors could bring bitcoin to new highs, Fournier added.
The PCE reading is forecast to show a 0.1% rise in June, following virtually no change in May and gains of 0.3% in the preceding three months, according to FactSet. The annualized figure is forecast to print at 2.4% for June, the smallest increase since 2021.
The continued progress toward the Fed's 2% target strengthens the case for interest-rate cuts by the central bank. Renewed liquidity easing against the backdrop of resilient economic growth highlighted by Thursday's US. GDP data could galvanize bids for risk assets, including cryptocurrencies.
Crypto investors are also anticipating Trump's scheduled speech on Saturday. Speculation has swirled all week that he might announce a bigger role for BTC in the financial system.
Other factors like the mining hashrate, which measures the amount of computing power dedicated to the network, and increasing stablecoin supply also flash bullish signals, according to crypto services provider Matrixport.
"The Bitcoin mining hashrate, a leading indicator for bitcoin rallies, has improved. Instead of inventory slashing, Bitcoin inventories continue to increase. The inventory build-up suggests confidence in future price increases despite some miners shutting down unprofitable machines," Matrixport said in a note to clients Friday.
Matrixport also noted that fiat-to-crypto inflows have picked up, as indicated by the recent increase in the market capitalization of the stablecoin sector.
"Historically, such increases have been bullish, signaling a shift of funds from traditional financial markets into the crypto sector," it said.
