bitcoin is moving higher at the time of writing, technically bullish but stabilizing below the August highs. Even though there are pockets of strength and the overall market sentiment is bullish, if we look at CoinMarketCap bitcoin/” target=”_blank” rel=”noopener nofollow”>surveyBuyers should do more.
Selling bitcoin at $74,000 would be “disastrous”
A break above the $65,000 and $66,000 resistance zone could trigger a wave of demand that could lift the coin to all-time highs. There will be hurdles at the $70,000 and $72,000 levels.
If buyers take control and the coin retests all-time highs, an analyst at x x.com/LeonidShalimov/status/1838761890853367872″ target=”_blank” rel=”noopener nofollow”>warns that those who sell at that level will make a “disastrous” mistake. From his perspective, exiting around $74,000 will be “too soon” as the currency could rise even further.
Technically, the coin remains within a bullish formation. On the monthly chart, buyers are in control despite the decline following the rally to an all-time high in March 2024. Specifically, btc prices are confined within a bullish flag. A close above the resistance trendline could trigger a takeoff, which would confirm gains in Q4 2023 and Q1 2024.
While technical candle formation may favour the bulls, fundamental factors play a crucial role in the analyst's view. The analyst argues that selling around $74,000 will be a mistake because, among other factors, the People's Bank of China (PBoC) is propping up the country's economy by injecting liquidity.
China injects liquidity and changes monetary and institutional policy to boost demand for btc
So far, the analyst notes that the central bank has released its 10-point easing plan to stimulate the struggling Chinese economy. The decision to inject liquidity and cut rates could have a positive impact on the world. Due to increasing global liquidity, bitcoin could benefit from more accommodative monetary policy by China, Japan, and the United States.
Additionally, bitcoin may find support in the weakening USD Index (DXY). As the dollar weakens, other economies, including those in Europe, may choose to further support their economies.
In turn, this move would trigger a flow of capital into hard assets like bitcoin. Gold is already trading near all-time highs and bitcoin could follow in the footsteps of the yellow metal as investors buy it to protect themselves from high inflation.
The analyst also pointed to other developments, such as the US approval of BlackRock’s application to list and allow options trading on IBIT, its spot bitcoin ETF. Couple this with interest from banks, including BNY Mellon, in bitcoin custody, and this could mark the beginning of fund managers accepting btc on behalf of their clients.
Featured image from Canva, chart from TradingView
