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Bitcoin Price is Getting Severely Overbought: Is it a Buy?

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Bitcoin price made a spectacular comeback in the past few days as investors reflect on encouraging data from the United States. The BTC/USD exchange rate surged to a high of $21,365, the highest point since November. It has risen by more than 35% from the lowest level in November. So, is the tide turning?

Will the Fed pivot?

Bitcoin and other global assets continued surging as investors reacted to the latest American economic data. Data published last week revealed that the American consumer inflation inched downward in December. It dropped to 6.5% in December, the sixth straight month of decline.

A week earlier, data by the Bureau of Labor Statistics (BLS) showed that the country’s unemployment rate dropped to 3.5% in December. In the same period, wage growth increased by 4.7%, lower than the previous month’s 5.2%. A decline in wage inflation is a positive sign for Bitcoin and other financial assets because of the Federal Reserve.

The Federal Reserve has been in a strong tightening phase in the past few months as it continues its battle against inflation. Its goal is to soften the economy and prevent a hard landing. Such a situation will happen when wage growth eases. 

Therefore, Bitcoin has risen because of the rising chances that the Fed will start to pivot. Historically, Bitcoin and other cryptocurrencies rises when the Fed turns dovish. It rose to an all-time high of $67,000 in 2021 as the Fed maintained rates low.

Bitcoin price has also risen because of the rising inflows in Binance and other exchanges. Binance, the biggest exchange in the world, has seen its inflows jump by over $1.8 billion in the past 30 days. Other exchanges like Kucoin, Bybit, Gate.io, and Deribit have seen inflows rise.

Bitcoin price prediction

Bitcoin Price

The daily chart shows that the BTC price has been in a strong bullish trend in the past few weeks. It has risen in the past 14 days straight. The coin has jumped above the key resistance level at $18,398, the highest point on December 14. It has moved above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved to the overbought level. 

Therefore, the coin will likely continue rising as buyers target the key resistance level at $23,000. A drop below the support at $20,000 will invalidate the bullish view.

Bitcoin

Bitcoin Price Could Get Extremely Ugly – Barrons

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Bitcoin (BTC/USD) price recent rebound has faded and its easy to see why. After soaring to a two-month high of $21,470, Bitcoin has pared back some of those gains to trade at $20,895. This decline is mostly because of the fundamentals and technicals of the coin as I will explain below.

Bitcoin Fundamentals

The main fundamental reason why Bitcoin is pulling back is the rising fears of a recession. A recent survey by WSJ placed the risk of a recession in the US at 61%. That is notable since it is the highest the figure has been in months. 

At the same time, Wall Street banks like Goldman Sachs, Citigroup, and Wells Fargo published weak financial results. Most of them said that their profits tumbled by more than 30% in the final quarter of 2022. Reading between the lines shows that most of them have allocated millions of dollars in credit loss provisons.

Historically, these provisions tend to rise when there is a fear of a recession. At the same time, many safe American companies have starte announcing substantial layoffs recently. Amazon is laying off 18,000 people while Microsoft, Salesforce, Meta Platforms are laying off thousands of workers. In a note, an analyst at Oanda said:

“Bitcoin prices are weakening as growth fears have Wall Street worried a…

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Bitcoin

2 Reasons Why Bitcoin Price is Soaring in 2023

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Bitcoin price has staged a strong comeback in 2023 as investors rushed to buy the dip. The BTC/USD exchange rate surged to a high of 21,465, the highest level since November. It has risen by more than 30% from the lowest point in 2022. Here are the top reasons why BTC price is soaring.

Mild recession hopes

Bitcoin and other financial assets like stocks and gold have rallied because of the falling inflation in the United States and around the world. Consumer inflation dropped from 7.1% in November to 6.5% in December. Core inflation dropped to 5.7%. 

And on Wednesday, data from the US showed that wholesale prices dropped by 0.5% in December, higher than the expected 0.1%. The producer price index (PPI), rose by 6.2%, the lowest level since March 2021. This decline happened because of the falling energy prices.

Another data showed that retail sales tumbled in December. They dropped by 1.1% in December, the biggest decline in 2022. In a note, an analyst at RSM said:

“The lag impact of elevated inflation weighs heavily on U.S. households, it’s very clear that the median American consumer is still reeling from the loss of wages in inflation-adjusted terms.”

A recession is often seen as a bad thing. But in the financial assets, it can be seen as…

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Bitcoin Price Forms H&S Pattern Ahead of US CPI Data

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Bitcoin

Bitcoin price drifted higher and approached the important resistance level at $18,000 ahead of the upcoming American inflation data. BTC was trading at $17,400, the highest point since December 16. It has surged by more than 6.50% from the lowest point in December.

US inflation data ahead

The main catalyst for Bitcoin and stocks this week will be the upcoming American inflation numbers scheduled for Thursday. Inflation is an important data that tends to move most financial assets like currencies, cryptocurrencies, stocks and bonds.

This happens because inflation is part of Fed’s dual mandate. According to the law, the Fed exists to ensure that inflation is stable and the unemployment rate is low. Data published last week showed that the Fed has achieved the latter since the unemployment rate stands at 3.5%, close to the lowest level on record.

Inflation, on the other hand, has started falling. Data published in December showed that the headline consumer inflation dropped for the second straight month. With gas and oil prices falling, analysts believe that inflation dropped to 6.5% in December. Core inflation, on the othe hand, is expected to drop to about 5.5%.

If analysts are correct, it means that the Fed will be under pressure to maintain its hawkish tone. In 2022, the bank decided to hike rates by 450 basis points, which explains why BTC…

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