Bitcoin has topped $70K but can it stay there? Here's why brn says yes.
Bitcoin is once again flirting with a rise for a fifth consecutive session as global markets become increasingly confident about the potential of interest-rate reductions this year from the Federal Reserve.
This has caused the price to rise over the $70,000 barrier. The top token is at $70,530, with its all-time high of $73,798, reached in the middle of March, in sight.
Bitcoin has been unable to reclaim its March all-time high price and is about 5% shy of that level.
On Tuesday, the biggest cryptocurrency reached its highest level in about two weeks, rising as much as 2.8% to $71,005.
It's All About America
After reports of slowing US inflation and a weakening job market, traders are pricing in a higher likelihood of the Fed reducing rates as early as September.
Speculative assets, such as cryptocurrency, will benefit from easing financial conditions, as certain Treasury rates had their biggest two-day declines of the year.
Optimists are encouraged by recent investments in specialized US exchange-traded funds (ETFs) and developments in Washington toward a crypto regulatory framework.
However, Bitcoin has recently failed to maintain gains of over $70,000.
Further advances in the equities measure may be matched by a rise higher in the crypto market leader, Bitcoin, according to a short-term 30-day correlation between the two.
This correlation is near the strongest since early 2023.
U.S. investors are increasingly seeking a narrative that is more in line with the declining trend of consumption, according to recent economic data.
This story goes beyond the "Goldilocks" approach.
While this does not necessarily mean that a recession is imminent in the actual economy, it does mean that a no-landing in the labour market is less probable than in the first quarter.
Despite being on the verge of leaving the building, Goldilocks is still inside.
While stock markets have not reacted as usual to worse-than-expected economic data, crypto investors are reading between the lines and moving ahead.
Bitcoin at $100,000?
According to billionaire Michael Novogratz of Galaxy Digital, Bitcoin might reach a new high of $100,000 by the end of the year.
Novogratz believes this is due to a more favorable US political climate for digital assets.
The billionaire said there has been a change in attitude towards crypto in the past several weeks.
Donations to political campaigns have flooded in favor of crypto-friendly candidates, and contenders for president have been using their positions on crypto to differentiate themselves.
Last week, a resolution in Congress would have overturned SEC regulations that the cryptocurrency sector claims have hindered its capacity to collaborate with banks; however, President Joe Biden rejected the measure.
Since its publication in 2022, the instruction, known as Staff Accounting Bulletin No. 121, has also faced resistance from banks.
According to lenders, the high expense prevents them from expanding their services to store digital assets for clients.
Feelings like these show that people have moved on from the disastrous digital asset bear market of 2022 and the scandals that followed, such as the fraud that brought down the massive FTX crypto exchange, but only temporarily.
brn's Take
Over at Blockhead's research arm, brn, analysts are remaining hopeful:
"While the crypto markets remain calm, Bitcoin went over $71K last night during American trading hours," a brn analyst stated. "It will face a strong resistance at $71,500 which it failed to break on the two last attempts but we believe it is consolidating and that it will break this level this month before attempting a new ATH."
However, the analyst expressed less enthusiasm about Ethereum, stating, "Nothing new on Ethereum, we’re still bullish as we wait for the unfolding of ETH ETFs and the discussion with the SFC on enabling staking on ETFs."
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