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Bitcoin Holds $30k: Is It Worth Waiting for the Next Round of Bullish Movement?
June 26, 2023 12:22 pmVideo
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Last week turned out to be full of surprises as the main cryptocurrency concluded its consolidation period and began an upward movement. As a result, Bitcoin recovered from a slow price decline in May in just two days. Subsequently, BTC continued its upward movement and reached a local high.
The cryptocurrency ended the Friday trading session with a retest of the $31.4k level, which is a new local high for the past year. On Saturday, Bitcoin made a second retest of the $31k level; however, later on, the asset’s prices began to decline under selling pressure. Bitcoin ended Sunday on a bearish note but held the $30k level, indicating the potential for further upward movement in the cryptocurrency.
Fundamental Factors
The decline in Bitcoin’s price was largely attributed to a decrease in trading activity over the weekend, primarily among large funds that form the basis of the bullish trend for BTC. The second important factor is the achievement of key levels above $31k, which significantly activated sellers.
Another reason is the overall decline in trading activity in financial markets, as indicated by the temporary strengthening of correlation between the SPX index and Bitcoin. The local increase in the level of interdependence was likely associated with news of a decrease in leading indicators in the U.S., which historically indicates a recession.
Nordea analysts state that the U.S. GDP will shrink by 2% in the current year. The combination of this news had an impact on the investment community after the head of the Federal Reserve announced plans to continue raising interest rates. The Fed funds futures market prices in a 77% probability of a rate hike in July, and therefore, markets are particularly sensitive to news related to the U.S. recession and economy.
Crypto Market Continues to Show Signs of Life
Despite the overall negative situation in financial markets associated with the Fed’s policy, crypto investors can boast a positive news background. Reports say that the Securities and Exchange Commission has approved the first leveraged crypto ETF in the U.S., the 2x Bitcoin Strategy ETF by Volatility Shares. The ETF fund will be listed on the CME based on the Bitcoin Futures Daily Roll Index.
It is also reported that Brazil’s largest bank, Itau, with a capital of $2 trillion, is joining the national Bitcoin Association. Another significant event will be the expiration of $3.3 billion in BTC and $2.1 billion in ETH. Such events are usually accompanied by a high level of volatility and price swings.
BTC/USD Analysis
As for the technical side, Bitcoin is trading near the $30.5k level, with daily trading volumes around $12 billion. The situation will likely change in the second half of the day, and trading activity may increase. The cryptocurrency looks bullish, and in the near future, we can expect movement towards key price levels.
Bulls managed to defend the $30k level, which guarantees the stability of the current upward movement. If the opening of the American market has a positive effect, the asset will resume its upward movement towards the $31k level and then $31.5k. The ultimate target for BTC in the short term is to establish a firm position above these levels.
However, we cannot exclude the possibility of a local price correction for BTC. The main technical indicators are in the overbought zone, and for a sustainable upward movement, the asset needs a local correction while holding the key level at $29k. However, it seems that the asset has not exhausted its entire upward potential of the current impulse.
Conclusion
Bitcoin looks bullish, and there is enough time until the next step in raising the key interest rate. Taking this into account, we can expect the price of BTC to move towards the $31k–$31.5k levels and attract additional liquidity. In the future, a local correction can be expected, which may occur during the expiration period. However, overall, the medium-term targets in the $35k–$36k range remain relevant.
The material has been provided by InstaForex Company – www.instaforex.com
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