It’s no surprise that BTC has been growing for the past 2 months. In fact, as it has been for several years, it only correlates with the stock market, which experiences a positive period during the summer months. After a long time in the USA, lower inflation was announced yesterday, which has a positive impact on the markets.
How is BTC reacting to the current situation?
BTC is currently at a 2-month high, partially erasing June’s decline. From the last low he found at $18,000, it is already in 40% profit. However, this is not unusual for the cryptocurrency market, as it is down about 70% from its peak. In the current situation, when the rather negative policy of the banks is expected to continue, I expect v further decline in the near future. Already in the past, the FED confirmed that interest rate increases after the summer should continue until the end of the year.
Current FED rates. Source: tradingeconomics.com
The month of September, which has been the worst month on the financial market for a long time, will be especially important. While the S&P 500, DJ, and Nasdaq, the largest stock indexes, have averaged gains of around 0.5% to 1% each month over the course of the year, they will see average declines of 1% in September.
According to data from Coingecko and Mint Research, September is the worst month for BTC. During the period from 2013 to 2020 only 2 years BTC has been growing this month. That’s why you have to prepare for a decline in the next period, rather than a bigger bullish movement.
What does technical analysis tell us?
BTC is at $24,000, where it has been rejected twice this summer. A growing triangle is forming on the market, which means a decline in volatility and trading volumes. It may also be related to the summer season, during which each year there is less activity on the stock market than usual.
For us, it means the arrival of a big movement, or a climax. Personally, more from the point of view of fundamentals and technical analysis I’m betting on a decline, which can easily be under $20,000. An alternative – but in my view less likely – scenario is continued growth to a maximum of $30,000, where I would expect the decline to begin. In both cases, I am tuned for the continuation of the long-term decline, and I take the current movement only as a correction of the previous, almost endless fall to $18,000. I do not rule out that BTC will also look at a lower level.
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