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October 4, 2022
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Bitcoin price analysis: BTC could jump to $ 55,000

And the price of Bitcoin continues to head north

Bitcoin (BTC / USD) rose to its highest levels so far at $ 52,640 on Wednesday after the minutes of the Federal Open Market Committee’s January meeting offer bullish guidance.

Fed officials have stated that they intend to maintain interest rates close to zero and maintaining the pace of asset purchases at around US $ 120 billion per month. Central bankers also noted that they would remain peaceful until they saw “substantial progress” towards maximum employment and at least 2% inflation, ignoring the provision of any additional details about their potential “hawkishness” in the future.

In Thursday’s trading so far, Bitcoin was consolidating laterally with a short-term trend for bears. The cryptocurrency experienced a settlement close to its record peak level, which had its price dropping below the $ 52,000 level. However, the intraday decline did little to offset Bitcoin’s long-term bullish bias, affecting the institutional adoption narrative.

Ongoing liquidity crisis

Last week, a wave of bullish events led traders to raise their bids in the Bitcoin market. It all started with Tesla’s revelation that it holds $ 1.5 billion in its balance sheets. The Fortune 500 company added that it plans to accept the cryptocurrency as payment for its electric cars, putting the bulls on alert for a potential upward boom.

BTC / USD took a leap after Tesla’s announcement on February 8. The pair received more favorable winds from Twitter and Uber that flirted with the idea of ​​investing in Bitcoin. Meanwhile, credit card giant Mastercard and the United States’ first banking service, Bank of New York Mellon, announced that would add cryptocurrency services to their traditional financial platforms.

Earlier this week, MicroStrategy announced which would raise $ 600 million through selling debts and investing profits in buying Bitcoin. The Nasdaq-listed company already owns more than 71,000 BTC units worth $ 3.67 billion at current exchange rates.

“Microstrategy is borrowing $ 900 million at 0% to buy more Bitcoins

Are you telling me that every CFO is not asking “why don’t we do this?”

Gradually, then suddenly. ”

Ben Lilly, a partner of Jarvis Labs – a cryptocurrency analysis platform, observed that institutions have sucked up a large portion of Bitcoin’s active supply – more than miners have extracted in the past eleven months – which has ultimately led to a liquidity crisis.

“Bitcoin was, and still is, leaving exchanges because of the institutions,” said the analyst in a note. “In fact, this means that the amount of Bitcoin available to interested buyers is drying up. Which, in turn, creates scarcity, demand pressure … And the reason why many of us are here, higher prices. “

He added that Bitcoin prices could grow further in 2021 if the crisis persists.

As noted on the four-hour chart, Bitcoin broke high on its Rising Wedge (wedge) pattern, an indicator of a bearish reversal.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

As of now, the cryptocurrency is awaiting a bullish confirmation, which means it could retreat towards Wedge’s uptrend line for support. In that case, a recovery can occur and raise the price equal to the maximum height of the wedge, which is almost $ 51,000.

This puts Bitcoin on its way to $ 55,000 if measured from the breaking point near $ 49,000. However, recovering the upper wedge trendline as resistance could cause Bitcoin to drop to $ 45,000.

Source: Bitcoinist

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