Bitcoin Bulls Fail Again, But There Is Still Hope

As a crypto investor, I’ve noticed that on Thursdays, when the U.S. announced a decrease in consumer prices for the first time in four years, there was a significant shift in market sentiment. The Fed rate cut bets were swiftly lifted as a result, causing higher-risk assets such as Bitcoin to surge.

It seemed for a brief instant that Bitcoin’s bulls might gain control and push the price above the downward trendline, marking the end of the sell-off from the June peak at around $72,000. This potential development could have attracted momentum traders, as previously mentioned in Thursday’s First Mover America.

Despite optimistic expectations, prices dropped sharply below the trendline resistance and fell beneath the $57,000 mark earlier today.

Recent setbacks in the stock market’s bull run, occurring amid a favorable economic news environment, could signal further price declines. The previous instance of trendline rejection in late July led to significant losses.

Despite the current situation, there’s a possibility that the bulls may make a comeback. A telling sign is the daily chart’s MACD histogram, which is on the verge of crossing above the zero line. This indicator is often used to identify trend direction and shifts, suggesting an upcoming bullish momentum change.

As a crypto market analyst at FalconX, I believe that the upcoming repayment of some $16.3 billion from FTX could lead to increased buying activity over the next few months. Furthermore, the growing support for cryptocurrencies from both regulators and industry players is an encouraging sign. Lastly, if the Federal Reserve decides to reduce interest rates in September, it may further boost the performance of risk assets like crypto. Therefore, medium- and long-term investors should feel more confident about their positions.

FalconX pointed out that the selling behavior of Mt. Gox’s creditors could differ significantly from Saxony’s sellers. For instance, a larger volume of sales might be directed towards cryptocurrency exchanges rather than experienced market makers, or an assorted group of investors may gradually sell off their holdings over an extended period.