Due to macroeconomic conditions, Bitcoin price is seeing huge fluctuations. BTC crossed $22.1k before falling slightly below $22,000 again. The largest cryptocurrency has gained close to 10 percent over the past 7 days. So what’s next? Here are some analysts’ expectations…
The latest developments affecting the Bitcoin price
Macroeconomic conditions are causing volatility in the crypto market. After nearly crossing $22.2K, Bitcoin price dropped below $21.8K. August Consumer Price Index data will be released tomorrow. These data are expected to have a significant impact on the Fed’s next rate hike decision. The Fed is expected to maintain a hawkish quantitative tightening stance to combat inflation. There is also talk that the Fed will want to quickly bring inflation below 2 percent.
The central bank doesn’t want rising inflation to become the norm in consumers’ minds. Louis Fed President James Bullard announced that he supports another 75 basis point rate hike. Minneapolis Fed chairman Neel Kashkari and Cleveland Fed chairman Loretta Mester have advocated an aggressive stance on inflation. The CME Fed Monitoring Tool now shows a 90 percent probability of a 75 basis point increase. The Fed is unlikely to return from its hawkish stance after September. According to Mester, the Fed will have to raise the interest rate target above 400 basis points to combat inflation. The current target rate is 225-250 basis points.
Will the rise in Bitcoin continue?
So, will the rise of BTC continue? James from Invest Answers is considering BTC’s critical resistance area of $21,750. He also believes that BTC will target the $24,000 price range. But experts also warn against rapid pump-dump as macroeconomic conditions are currently uncertain. On the other hand, crypto strategist Rager says that nothing is guaranteed in Bitcoin trading. However, he acknowledges that BTC has formed a base above $19,000. “A lot of people ask if this cycle is miscarriage. It’s possible. We don’t know,” he says.
Rager adds that Bitcoin is still tightly correlated with the S&P 500 (SPX). He also says that Bitcoin will not exhibit lows in cycles as long as the SPX is above 3,896 points. He says that as long as the stock markets are doing well, “there is no reason to think that Bitcoin will drop to $12-13k any time soon.”
Will Clemente: Bitcoin is giving bull signals
Meanwhile, crypto enthusiast and analyst Will Clemente put forward the thesis that BTC is currently undervalued. The specialist brought a number of interesting arguments for his statement. Clemente pointed to negative funding and successful retrograde transitions in BTC futures contracts on cryptocurrency exchanges. Also, Bitcoin is starting to dominate again as its index hit its lowest value since 2018 and jumped to around 40% at one point.
Think market is underweight BTC
– Several weeks of open interest with negative funding and backwardation engulfed in 1 candle
– Successful test of demand in Coinbase orderbook
– BTC dominance bouncing off 2018 support
– Commodities rolling over, CPI likely lower than expected pic.twitter.com/pisef1hiND
— Will Clemente (@WClementeIII) September 10, 2022
The analyst also pointed to a number of bullish signals, citing the status of divergences and on-chain measurements as evidence. Clemente’s view on more transient signals is the most interesting. The expert points out that the number of people who say “Bitcoin is dead” is increasing in the crypto space. He believes this shows that the market has bottomed out. However, possible doubts still lurk about US monetary policy and specifically the Fed’s fight against inflation, which directly affects the price of cryptocurrencies. According to the analyst on this question, it is worth waiting for inflation to decline after a series of aggressive rate hikes by the regulator.
Jared Blikre reveals his $40,000 goal
In a recent tweet, Yahoo Finance analyst Jared Blikre said that $40,000 could be a “major upside target” for Bitcoin, the world’s largest cryptocurrency. Blikre explains that the flagship cryptocurrency has formed a massive base at $20,000. On September 6, Bitcoin fell to $ 18,669, the lowest level since June, as we reported on Cryptokoin.com. However, the bulls managed to step in to save the day. In the past five days, the price of the leading cryptocurrency has increased by about 18 percent. Blikre noted that he has “tons” of price memories from the $30,000 level and the $60,000 level.
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