Sat 10 Aug 2024 ▪
4
min read ▪ by
The drop of Bitcoin below 50,000 dollars last Monday already seems far behind us. In just four days, the queen of cryptocurrencies has regained its color to surpass 60,000 dollars again. This rapid rebound reflects the intrinsic volatility of the crypto market and opens the door to bullish prospects, hinting at a potential major rally according to some analysts.
Is Bitcoin ready for a new bull market?
After a severe correction that saw Bitcoin lose nearly 30% of its value, technical signals are increasingly positive. Indeed, since its low point around 50,000 dollars, the flagship crypto has already recovered 26%, thus breaking short-term resistances.
This type of rebound is not a first for Bitcoin. During the 2016 BTC halving, a similar drop preceded a rapid bull market, leading this crypto to unprecedented heights.
This time again, the configuration seems favorable for a new ascent. The behavior of the RSI (Relative Strength Index) and the moving averages show encouraging signs of a recovery.
Analysts, including Peter Brandt, believe that the recent decline was just a necessary step to shake out the weak hands before a surge to new records.
The crypto market in the turmoil of the carry trade
While some attribute the recent Bitcoin drop to technical factors, others point the finger at the yen carry trade as the culprit. To put it simply, investors who had borrowed yens at low-interest rates to invest in more profitable assets suddenly found themselves having to liquidate their positions.
This massive sell-off affected all markets, including that of cryptos, causing a rapid drop in prices.
Matt Hougan, Chief Investment Officer at Bitwise, answering the question “does Bitcoin really have value” emphasizes that this sell-off has fundamentally changed nothing about Bitcoin. For him, this decline is more related to an urgent need for liquidity than to a long-term trend change.
According to Hougan, “Bitcoin was simply caught in the storm, but the fundamentals remain strong“.
Prospects: Bitcoin at 100,000 dollars?
With Bitcoin’s recent recovery above 60,000 dollars, the question now is how far it could go. Some technical analysts see big and predict a move towards 100,000 dollars, or even 300,000 dollars. Bitcoin at 100,000 $ being the crazy bet of an expert before the US elections.
This scenario could materialize if current indicators continue to show signs of strength, such as improving RSI and maintaining above key moving averages.
However, it’s worth noting that crypto markets are notoriously unpredictable. Despite this, the current market configuration, combined with growing investor confidence, hints at a new bullish wave.
The most optimistic even see it as the beginning of a similar cycle to 2017, where Bitcoin experienced a spectacular rise after a halving. Although the post-halving BTC rise resembles a broken dream.
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La révolution blockchain et crypto est en marche ! Et le jour où les impacts se feront ressentir sur l’économie la plus vulnérable de ce Monde, contre toute espérance, je dirai que j’y étais pour quelque chose
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.